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Despite falling in January, the Swedish Economic Tendency Indicator is consistent with an acceleration in annual GDP growth to about 6%. As such, underlying price pressures should pick up and the Riksbank’s next move will be to tighten policy. … Swedish …
27th January 2017
December’s labour market data suggest that wage pressures are building in Sweden, supporting our view that the Riksbank will tighten policy this year. But in Norway, despite November’s fall in unemployment, slack remains in the labour market. … Sweden …
26th January 2017
On the whole, the activity data suggest that GDP growth in the Nordic and Swiss economies has picked up. Granted, Icelandic consumer confidence suggests that growth might have slowed slightly. But it is still at a level consistent with annual GDP growth …
25th January 2017
Prospects for the Nordic and Swiss economies’ are fairly good, with Sweden and Iceland likely to be the best performers. But the outlook for inflation, and therefore monetary policy, varies substantially. The Swedish economy is firing on all cylinders, …
20th January 2017
December’s rise in Swiss producer and import price inflation does not change our view that headline consumer price inflation will be barely positive in the medium term. Accordingly, monetary policy will have to remain extremely loose. … Swiss Producer & …
19th January 2017
In the land of fire and ice, currency movements in 2016 resembled an erupting volcano rather than a creeping glacier. The appreciating króna put downward pressure on inflation, prompting the Central Bank of Iceland (CBI) to cut interest rates twice. While …
13th January 2017
Today’s minutes confirmed that only half of the Riksbank’s Executive Board supported the extension of its QE programme. And with inflation surpassing expectations in December, there is little cause for further monetary policy loosening – we expect the …
12th January 2017
In December, the Norges Bank’s favoured measure of inflation edged down to a 19- month low. We think that it will fall further, prompting the Bank to cut its key policy rate by 25 basis points in the second half of the year. … Norwegian Consumer Prices …
10th January 2017
In December, Swiss headline inflation exited negative territory for the first time in two years, but core inflation remained below zero. So the latest data will do little to ease fears that the economy is experiencing a sustained bout of damaging …
5th January 2017
Following a host of central bank meetings last month, most of the Swiss and Nordic currencies fell against the US dollar. While there were few major changes for bond yields, equities in most countries recorded impressive gains. … Currencies depreciating …
4th January 2017
December’s PMIs suggest that Swiss, Swedish and Danish manufacturers ended 2016 on a strong note, but their Norwegian counterparts are still lagging behind. … Manufacturing PMIs …
3rd January 2017
While the Riksbank extended QE today, a number of the Executive Board dissented, suggesting that today’s announcement marks the beginning of the end for policy loosening in Sweden. Indeed, despite its dovish rhetoric, we think that the Riksbank will be …
21st December 2016
A huge rise in manufacturing confidence, to within touching distance of a record high, pushed the Swedish Economic Tendency Indicator higher still in December. This calls into question the Riksbank’s commitment to loosen policy further and supports our …
20th December 2016
Recent national accounts data showed a marked divergence in quarterly economic growth in Q3, with the Swiss economy stagnating while the Icelandic economy expanded by an impressive 4.6% q/q. In the middle of the pack, Sweden, Denmark and Finland recorded …
The Norges Bank’s decision to leave interest rates unchanged came despite a deterioration in the outlook for growth and inflation. While policymakers remain concerned about the impact of loose monetary policy on house price inflation, we suspect that they …
15th December 2016
The Swiss National Bank’s decision to leave interest rates on hold and pledge continued currency intervention was as expected. The Bank may have drawn some comfort from the franc’s recent decline against the US dollar. But the currency’s strength against …
The Central Bank of Iceland’s (CBI’s) decision to cut interest rates before the next phase of capital account liberalisation came as a surprise. While the strong economy calls for policy tightening in the long term, a further sharp appreciation of the …
14th December 2016
As inflation was a touch weaker in November than the Riksbank anticipated, monetary policy is set to be loosened further. While we expect the Riksbank to announce an extension of QE, the already-weak level of the krona suggests that it will hold back from …
13th December 2016
The Swiss National Bank will stress after its meeting on 15th December that it is prepared to act decisively to prevent any significant appreciation of the Swiss franc in the coming months. Indeed, the Bank has already increased its intervention in …
The Norges Bank is almost certain to leave monetary policy unchanged at its meeting on 15th December. Indeed, in October, the Bank repeated its message that “the key policy rate would most likely remain at [0.50%] in the period ahead”. However, we think …
9th December 2016
Little has changed since the Central Bank of Iceland (CBI) last met and so, like last month, policy will be unchanged next week. As political and exchange rate uncertainty fades next year, concerns that the CBI will continue to miss its inflation target …
8th December 2016
The Nordic and Swiss economies generally recorded positive growth in Q3 and look set to do so again in Q4. But with growth in their main trading partner, the euro-zone, set to slow and a number of political risks on the horizon, there are challenges …
7th December 2016
While November’s fall in Swiss inflation was mainly due to energy effects, the weakness of core inflation will do little to ease fears that the economy may be experiencing a sustained bout of damaging deflation and keeps the onus on the Swiss National …
6th December 2016
Swedish industrial and services output started Q4 on a fairly weak note, but forward-looking indicators also released this morning were more positive. As such, it still seems likely that Swedish GDP growth will pick up in Q4. … Swedish Industrial & …
5th December 2016
The stagnation of Swiss GDP in Q3 demonstrates the negative impact that deflation and the strong franc have had on the economy. With a plethora of political risks inthe euro-zone set to keep the franc strong, exporters are unlikely to get a respite soon. …
2nd December 2016
The election of Donald Trump in the US drove large moves in Nordic and Swiss financial markets last month, with currencies generally depreciating against the US dollar while long-term bond yields increased. … External market drivers Trump domestic …
1st December 2016
November’s PMIs suggest that Swiss and Swedish manufacturers are performing well, while their Norwegian and Danish counterparts are still lagging behind. … Manufacturing PMIs …
Sweden’s decent economic expansion in Q3 masks a sharp slowdown in domestic demand growth. But with survey indicators pointing to a renewed acceleration in GDP growth in Q4, that slowdown looks set to be temporary. … Swedish GDP (Q3, 1st …
29th November 2016
The Economic Tendency Indicator now points to annual Swedish GDP growth of over 4%, while consumers’ inflation expectations have also jumped. Both factors suggest that any further loosening by the Riksbank will have to be reversed before long. … Swedish …
24th November 2016
September’s Norwegian Labour Force Survey (LFS) provided some hints that the recent rise in unemployment might be coming to an end. Meanwhile, other perhaps more reliable measures of unemployment have painted a more positive picture of the labour market. …
23rd November 2016
Swedish inflation is set to rise sharply over the next year. As such, the Riksbank’s intention to loosen monetary policy further seems like a mistake and any additional interest rate cuts will have to be reversed before long. Ultimately, we expect the …
22nd November 2016
October’s consumer prices data highlight the contrasting inflation outlooks in Sweden, Switzerland and Norway. In Sweden, consumer price inflation picked up to its strongest rate in four-and-a-half years. And the krona’s depreciation, as well as the …
18th November 2016
The Swiss National Bank’s (SNB’s) pledge to intervene in foreign exchange markets appears to havealleviated upward pressure on the franc in the wake of the US election. But experience has shown itspolicy limitations and we suspect that the franc will …
16th November 2016
The Central Bank of Iceland’s decision to keep interest rates unchanged rests on overly cautious assumptions for the króna and on fears about fiscal policy and capital controls that will probably not be realised. As such, interest rates may yet be cut …
October’s rise in inflation was driven almost entirely by energy effects whileunderlying measures of inflation remain weak. As such, the Riksbank seems all butcertain to loosen monetary policy at its next meeting in December. … Swedish Consumer Prices …
15th November 2016
Norway’s economic recovery slowed in Q3, while Finland’s picked up. But surveys suggest that growth in both countries might improve over the coming quarters. … Norwegian & Finnish GDP …
In October, the Norges Bank’s favoured measure of inflation was unchanged at a joint 14-month low. We think that it will fall sharply next year, prompting the Bank to cut its key policy rate from 0.5% to zero. … Norwegian and Danish Consumer Prices …
10th November 2016
We think that the sharp appreciation of the króna over recent months will prompt the Central Bank of Iceland to cut its inflation forecasts next week. As a result, although the Bank has previously stated that it would act cautiously in monetary policy …
Today’s minutes showed broad support for an extension of the Riksbank’s government bond purchase programme. Combined with the uncertainty created by Donald Trump’s victory in the US, an extension of bond purchases by the Riksbank now seems all but …
9th November 2016
We suspect that the Nordic and Swiss economies will see limited effects from Mr Trump’s victory. Butit makes monetary policy divergence between Switzerland and Sweden next year slightly more likely. … Trump win could widen policy divergence next …
The importance of international trade to the Nordics and Switzerland, as well as the franc’s role as a safe haven, mean that the outcome of the US election is potentially important to the region. This Watch explores the implications in more detail. … What …
8th November 2016
October’s Swiss CPI data did little to ease fears that the economy may be experiencing a sustained bout of damaging deflation. This supports our view that additional monetary policy support will be needed and that the Swiss National Bank (SNB) looks set …
7th November 2016
The most noteworthy market developments last month were prompted by expectations of further policy loosening from Sweden’s Riksbank, with the krona depreciating sharply last month as a result. Meanwhile, bond yields increased inmost countries while equity …
3rd November 2016
September’s sharp rise in Swedish industrial production suggests that August’s large fall was due to one-off effects. Looking ahead, the rise in the services PMI supports the message from earlier surveys that GDP growth is set to accelerate. … Swedish …
October’s manufacturing PMIs generally painted a positive picture of economic growth.But the surveys’ price indices suggest that inflationary pressures vary across the region. … Manufacturing PMIs (Oct.) & Swiss Retail Sales …
1st November 2016
The next Icelandic government may be an unconventional one, but improvements to Iceland’s public finances and external position since the crisis mean that there is little risk to economic growth. … Little risk to growth from Iceland’s …
31st October 2016
October’s rise in the Swiss KOF Economic Barometer suggests that GDP growth could accelerate in the near term. But with the full effects of the franc’s strength yet to be felt and deflation risks persisting, monetary policy may still be loosened further. …
28th October 2016
Headline Icelandic inflation was stable in October and the core rate fell slightly. But with the economy continuing to strengthen, we think that underlying inflation will pick up in the coming months. … Iceland Consumer Prices …
27th October 2016
It seems very likely that the Riksbank will extend its bond purchase programme after it stepped up its dovish rhetoric and suggested that it might even cut the repo rate further. But given our expectation for growth and inflation to surpass the Riksbank’s …
The Norges Bank left its key policy rate on hold today and reiterated that no change was likely in the near future. But we think that more monetary loosening will be needed in 2017. … Norges Bank leaves policy unchanged, but rate cuts to …
