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Headline inflation in Norway slowed in June, and we think that it will fall further. Over the next few years, it is likely to remain below the Norges Bank’s target, so we think that interest rate hikes are a very long way off. … Norwegian Consumer Prices …
10th July 2017
The fall in Swiss inflation in June largely reflected lower energy prices. With core inflation holding close to zero, the SNB will stick to its ultra-loose policy stance over the next couple of years. … Swiss Consumer Prices …
6th July 2017
While both industrial and services output grew in May, both sectors are set to record weaker growth in Q2 than in Q1. But as the monthly data were a poor guide to GDP growth in Q1, we are inclined to believe the more positive message from the surveys. … …
5th July 2017
By indicating that it no longer expects to cut interest rates, the Riksbank has taken a small step toward monetary policy normalisation. While the Bank indicated that it will continue to guard against a rapid appreciation of the krona, we expect its …
4th July 2017
Government bond yields in the Nordic and Swiss economies have risen recently, and for the most part we expect this to continue. Yields in Sweden are likely to rise the furthest, while those in Switzerland will only edge higher, and in Norway they may even …
3rd July 2017
The Nordic and Swiss PMIs strengthened in June, pointing to faster manufacturing growth. The Swedish survey suggests that inflation will fall, probably reflecting energy effects. But we still expect strong economic growth to push core inflation up this …
Bond yields across the Nordic and Swiss economies increased in June, in line with global market moves following major central bank speeches that prompted investors to bring forward their expectations for monetary policy normalisation. Meanwhile, equity …
30th June 2017
June’s rebound in the Swiss KOF Economic Barometer leaves it consistent with a pickup in annual GDP growth to around 2%. But with inflation still very low, we expect the SNB to keep the stance of monetary policy very loose. … Swiss KOF Economic Barometer …
The Norges Bank’s latest projections suggest that it is unwilling, or unable, to loosen policy by enough to hit its inflation target. This will weigh on economic growth over the coming years, and probably hinder the necessary medium-term rebalancing of …
28th June 2017
Since the Riksbank last met in April, underlying inflation has been stronger than expected, international political risks have diminished and economic conditions in Sweden’s trading partners have improved. In light of these developments, next week we …
The Norges Bank revised up its forecast for interest rates this year, so a cut now looks unlikely. But while the Bank expects to raise its policy rate in 2019, we think that it will be unchanged until 2020. … Norway rate cut off the table, but a long way …
22nd June 2017
The Swedish Economic Tendency Indicator points to strong and broad-based growth, consistent with an acceleration in wage growth and a pick-up in underlying inflation. … Swedish Economic Tendency Survey …
21st June 2017
Swedish employment growth seems set to slow but the unemployment rate should nevertheless drift lower this year after being unchanged in May. And with over one third of firms suffering from a shortage of labour, we expect wage growth to pick up. … Swedish …
20th June 2017
The latest national accounts data showed that quarterly GDP growth in most of the Nordic and Swiss economies picked up in Q1, led by Finland. The Finnish economy expanded by 1.2% q/q, followed by Denmark and mainland Norway with quarterly GDP growth of …
16th June 2017
The Norges Bank is likely to leave interest rates unchanged at its meeting in June, but we think that it will revise its rate forecast down. After all, while economic growth has strengthened since the Bank last produced forecasts, consumer price inflation …
15th June 2017
The Swiss National Bank’s decision to leave interest rates on hold and pledge continued currency intervention if needed reflected the fact that inflation is still very low. With price pressures likely to remain subdued, we think that the SNB won’t start …
There is little sign that the Central Bank of Iceland (CBI) expects to reduce interest rates further after today’s cut, but we think there is scope for a further appreciation of the króna to weigh on imported goods and services prices. As such, we suspect …
14th June 2017
The collapse of Finland’s government will not throw the country’s economic reforms off track. We still expect the economy to grow by about 2% this year. And while the renewed political instability in the euro-zone might seem worrying, it will probably …
13th June 2017
Underlying inflation was stronger than expected in May and domestic inflation should rise further from its 63-month high. As this will help to offset any disinflationary impact from a stronger krona due to tighter monetary policy, the Riksbank will become …
Norwegian inflation resumed its decline in May, and we think that the fall has further to run. So we still forecast one interest rate cut by the Norges Bank later this year. … Norwegian Consumer Prices …
9th June 2017
The Swiss National Bank will once again stress after its meeting on 15th June that it remains prepared to act to prevent any significant renewed appreciation of the Swiss franc. Granted, the recent depreciation of the currency against the euro, as …
8th June 2017
Ahead of next week’s meeting, today’s soft GDP data are unlikely to concern the Central Bank of Iceland too much. The fact that last month’s interest rate cut has done little to stem the króna’s strength will receive more attention. While we expect …
Nordic and Swiss equities have generally performed very well this year, but prospects differ significantly between countries. We expect Norwegian equities to outperform over the next 18 months as oil prices rise, but Swedish equities to struggle next year …
7th June 2017
As April’s surprise drop in Swedish industrial production was probably due to temporary factors, we expect output to rebound in May. And while the hard data have been weaker than the surveys suggested, there are still signs that domestic demand is growing …
The recent pick-up in growth in Finland has been broad-based, and Government reforms have improved the medium-term outlook. We expect GDP growth to beat the consensus forecast this year. … What’s behind the turnaround in …
1st June 2017
The PMIs in Switzerland, Sweden and Norway weakened again in May, but still point to faster manufacturing growth. But the Danish PMI rebounded after April’s plunge. … Manufacturing PMIs …
Switzerland’s economic recovery gained pace in Q1 and business surveys suggest that this momentum will continue. But with inflation set to remain very subdued, we think that the SNB will keep policy very loose in the coming years. … Swiss & Finnish GDP …
The Nordic and Swiss currencies all appreciated against the US dollar in May, but performances against the euro were mixed. Following global trends, government bond yields generally declined. While sovereign yield curves in some countries flattened, the …
31st May 2017
The Danish economy made a good start to 2017, posting another decent quarterly expansion in Q1. Although the composition of growth was not that encouraging, the outlook is more positive. … Danish GDP …
The slowdown in Swedish quarterly GDP growth in Q1 masked a strong rise in domestic demand. And with April’s pick-up in retail sales boding well for growth in Q2, underlying inflation should continue to increase towards the Riksbank’s target. … Swedish …
30th May 2017
Given the improvement in the euro-zone’s political and economic outlook and the relative stance of monetary policy, we no longer expect the Swiss franc to appreciate against the euro. But the franc will remain historically strong, leading the SNB to keep …
25th May 2017
Despite slipping in May, the Swedish Economic Tendency Indicator continues to point to very strong economic growth. With the labour market therefore set to tighten further, we expect stronger wage growth to drive a pick-up in underlying inflation. … …
24th May 2017
Despite April’s rise in the Swedish unemployment rate, it remains low by recent standards. And with over one third of firms suffering from a shortage of labour, we still expect wage growth to pick up. … Swedish Labour Force Survey …
23rd May 2017
Today’s decision by the Central Bank of Iceland to cut interest rates is likely to be followed by another cut later this year. Granted, strong economic growth will put pressure on domestic inflation. But we think that the CBI is still underestimating the …
17th May 2017
The Riksbank has stated that its new inflation tolerance band will have no effect on policy. But with some Board members growing increasingly concerned about the effects of ultra-loose monetary policy on the housing market, the added flexibility could …
16th May 2017
Norway’s recovery gathered pace in Q1, and forward-looking indicators suggest that this should continue. That said, we doubt that this will have much of a bearing on monetary policy. Meanwhile, Finland’s economy performed very well in Q1. … Norwegian GDP …
In the past month, central bank meetings have highlighted contrasts in the responses of policymakers towards inflation. In Sweden, inflation has been on an upward trend recently and is close to the Riksbank’s 2% target. But the Bank still announced an …
12th May 2017
Following the sharp drop in the Icelandic króna after the lifting of capital controls in March, we pushed back our forecast for an Icelandic interest rate cut from May to August. But since the currency has recovered quicker than even we had expected, a …
11th May 2017
The sharp divergence in Swiss and Swedish inflation in April supports our views that the Swiss National Bank will need to keep monetary policy loose for a long time to come but that Sweden’s Riksbank will raise rates next year. … Swiss & Swedish Consumer …
Today’s Riksbank minutes suggest that the proponents of last month’s shock QE extension are unlikely to change their minds on the direction of monetary policy any time soon. So there is little chance of a material shift in the Riksbank’s policy stance …
10th May 2017
The sharp decline in Norwegian CPI-ATE inflation has paused over the past three months, but it should soon resume. We think that it will fall to 1.0% later in the year, and remain well below the Norges Bank’s target in the medium term. … Norwegian & …
March’s Swedish production data suggest that GDP growth picked up further in Q1. And as stronger activity is consistent with a rise in inflationary pressure, we think that the Riksbank will have to raise interest rates sooner than it currently …
5th May 2017
The Norges Bank’s decision to leave interest rates unchanged came as no surprise, but we are among a very small minority of forecasters who think that the Bank will cut rates later in the year. … Norges Bank stands pat, but a rate cut not far …
4th May 2017
After depreciating against the euro in April, we think that the Swiss franc, Swedish krona and Norwegian krone will rebound, but for different reasons. Political risk could yet re-escalate in Europe and elsewhere, boosting demand for the safe-haven franc. …
3rd May 2017
The PMIs weakened in April, but still point to faster manufacturing growth. And the Swedish survey suggests that inflation there will rise, supporting our view that the Riksbank erred in extending its asset purchases. … Manufacturing PMIs …
2nd May 2017
Following Mr Macron’s victory in the first round of the French presidential election, Nordic and Swiss currencies depreciated and government bond yields rose. And dovish comments from policymakers at the ECB and Riksbank added more downward pressure to …
28th April 2017
April’s fall in the Swiss KOF Economic Barometer leaves it still pointing to a pick-up in annual GDP growth to around 2%. But with inflation extremely low and given signs that the strong franc is affecting exports, we expect the SNB to keep policy very …
The Norges Bank is almost certain to leave monetary policy unchanged at its meeting next week. After all, the Bank will not be updating its forecasts, and there has been little to change policymakers’ minds about the economic outlook. So for now at least, …
27th April 2017
Only the Riksbank Governor’s casting vote secured today’s unexpected QE extension. While we have pushed back our expectation for the first repo rate rise in Sweden, we still think that the Riksbank will have to raise rates sooner and faster than it …
The sharp jump in the Swedish Economic Tendency Indicator is consistent with our view that in tomorrow’s monetary policy announcement the Riksbank will signal an end to its asset purchases programme. And with stronger growth consistent with rising …
26th April 2017
