In Sweden, the week ahead will provide more information on both how the export industry and the retail service sector (both released Monday, 09:30 CEST) are performing.
We argue that it is now time to position for a wider ASW spread in the 10Y segment on the SGB curve and we recommend to buy SGB 1058 (May '25) asset swapped. The free float in SGB1058 (May 2025) has decreased significantly due to the Riksbank purchases and it is now a relatively small loan.
In Norway, retail sales have been moving sideways for a couple of months, so the August data for the latter will be important in gauging whether the tide has actually turned. The main reason for the downturn in Norway is, of course, the drop in oil investment hitting mainland manufacturing. The PMI has been pointing to a further decline in Q3, and based on the latest fall in oil prices and the slowdown in global industrial production this might have intensified in October.
Given the dovish Norges Bank last week, we still like to receive NOK rates or buy NGBs in the mid-segment of the curve. We also argue that the NOK will stay weak at least for now.
In Denmark, the Nationalbank is set to publish its currency reserves data for September. Although the reserve has decreased by an average of DKK40bn a month during this period, they were still high in August at close to DKK540bn, which is around DKK75bn more than in December last year. Hence, even if we see intervention of the same magnitude in September, we do not believe a Danish rate hike is imminent at all. In fact, the outflow might have slowed down in the past couple of weeks as EUR/DKK has traded closer and even below the central parity at 7.46038.The Nationalbank will also be releasing figures for foreign portfolio investments and its securities statistics, both for August.
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