It cannot be excluded, but we believe the chance of a rate cut in July is higher. What could prove decisive is next weeks March PMI figures. Judging by preliminary German PMIs, Swedish Manufacturing and Services PMI could both drop down a notch.
New NIER inflation forecasts showed that we are not the only ones arguing that the Riksbank has a long-term structural problem with too low inflation.
The SEK could see a test of 9.02 as flows remain a headwind for the SEK and as Riksbank cut expectations gains traction.
In Norway, focus turns to the retail sales, credit indicator, PMI and unemployment data.
Despite small changes to the rate path by Norges Bank last week, the announcement took away an important risk factor for the NOK after the many dovish surprises seen in 2013. Hence, the recent move lower in EUR/NOK is fair and a further move lower in the cross is likely if the ECB eases monetary policy this week as we expect. It also seems that the sentiment towards Norwegian government bonds has improved after 10Y yields traded close to Irish yield levels before last week's NGB tap.
In Denmark, it will be worth keeping an eye on the Nationalbank's currency reserves data for March due to be published on Wednesday. The krone is still relatively weak against the euro and has been trading as high as 7.4670 in the past week, a level that has previously prompted the central bank to intervene.
This week Denmark is tapping in the 2Y and 10Y segment. The 2Y segment should be well supported by the steep Danish curve in the front end, while the 10Y will benefit, as this will be one of the last auctions in DGB 1.5% 2023 as a new 10Y government bond will be introduced in May.
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