In Sweden we receive industrial orders and production on Wednesday at 09:30 CEST. We would like to see a stronger trend but we fear a moderation of growth rates. PMIs from both manufacturing and services are due for release on Monday and Wednesday, respectively, at 08:30 CEST, but we must underline again that these are weak and unstable indicators of the Swedish economy.
We now recommend buying 10Y SGBs versus Germany after the recent underperformance.
In Norway , the government is set to unveil its budget for 2017 on Thursday. We forecast a fiscal stimulus of around 0.6% of GDP, or NOK 20bn, which would be more or less in line with the assumptions made by Norges Bank in the September monetary policy report and therefore would not have an impact on interest rate expectations.
The week also brings PMI data for September on Monday and industrial production figures for August on Friday. Both series have shown a clear rise in industrial activity since Easter but have been more volatile of late.
In Denmark , the Nationalbank will publish FX reserves numbers for September on Tuesday. The reserves have been relatively flat since June, and although the DKK has weakened against the EUR in September, it is still trading below the central parity rate and any intervention to support the DKK would be a major surprise.
Wednesday brings housing prices for July from Statistics Denmark. July was the first month after Brexit and saw Danish yields hit new record lows, but uncertainty in the wake of the UK vote may have left some homebuyers worried and a little more cautious, so it will be interesting to see what the net result is.
On Wednesday, the Danish Management Debt Office will tap the usual 2y and 10y benchmark bonds. There is a risk that demand will be weaker than usual given the recent underperformance. However, the recent stabilisation in EUR/DKK should support demand.
To read the entire report Please click on the pdf File Below