Following the chunky DKK 47 billion intervention by Denmark’s Nationalbank in December to weaken the krone, we suspect that the bar for a rate cut has already been cleared comfortably. So while many central banks are eyeing raising rates, we have now pencilled in a 10bp rate cut in Denmark in Q1, to -0.70%, and think this could come as soon as the end of this month. Next week, the release of inflation data from Sweden will show that surging electricity prices lifted headline inflation to a 28-year high in December.
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