In Sweden industrial and services production (both published Monday, at 09:30 CEST) will be in focus, but we are actually more interested to see what is happening with the export orders, especially given the rather weak developments in goods exports.
From other data out during the week ahead, we will also have an opportunity to gauge how household consumption is decelerating and contributing less to overall GDP-growth.
In Norway the September PMI was encouraging in this respect, but it may be too early to hope for a similar signal from actual industrial production in August. We predict a slight correction in the form of an increase of 0.3% m/m.
The inflation figures will probably be somewhat less important than usual in September, given that Norges Bank has made it clear that it both expects and accepts that core inflation will be well above the 2.5% target for a while.
We do not anticipate any major surprises in the Norwegian national budget for 2016. The expansionary effect will probably be just under 0.5pp of mainland GDP, which should be neutral in terms of interest rate setting. It is still unclear just what the government's priorities will be but we consider it unlikely that the changes will be sufficient to prompt any major market reaction.
See also our in-depth focus on the Norwegian krone on page 4.
This week the Danish Debt Office is returning to the market. It will conduct two taps in the Nov '16 and the Nov '25 DGBs. We argue that the recent underperformance for DGBs versus Germany, the slowdown in FX intervention in September, a EUR/DKK spot-level close to the central parity, the recent drop in T/N rates and upcoming coupon and redemption money are factors that create a constructive environment for the Danish fixed income market. The resumption of issuance should also slowly improve liquidity in the Danish government bond market. All in all, we look for decent investor demand at the auctions this week.
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