Filtered by Subscriptions: Nordic & Swiss Economics Use setting Nordic & Swiss Economics
The low use of gas, and a reliance on nuclear and renewables for electricity generation, means that Switzerland and the Nordics are less exposed to the recent surge in gas prices than other parts of Europe – particularly Spain. While Switzerland and the …
20th September 2021
Policymakers at a three-pronged fork in the road Next week’s three central bank announcements from Sweden, Switzerland, and Norway (in that order) promise to offer something for everyone, whatever their predilection on the policy front. The Riksbank will …
17th September 2021
While the Swiss National Bank is set to leave interest rates on hold yet again next Thursday, the Norges Bank will finally pull the trigger on its tightening cycle. Given the backdrop of global risks such as the Delta variant and supply issues, we suspect …
16th September 2021
The momentum in the Swedish economy, and jump in inflation in August, gives the Riksbank plenty to ponder at next week’s policy meeting. While repo rate hikes are not on policymakers’ agenda, the reduced risk of disinflationary pressures lends support to …
14th September 2021
Stronger inflation to change the conversation at the Riksbank The stronger-than-expected pick-up in Swedish headline inflation in August ups the ante for the Riksbank ahead of next week’s policy meeting. While repo rate hikes are low down on policymakers’ …
Norway is a riddle, in a mystery, inside an enigma Norwegians will go the polls in parliamentary elections on Monday in what has been dubbed the “climate election”. The run-up to the vote has been dominated by a debate over the appropriate speed at which …
10th September 2021
Weak core inflation will not prevent tightening cycle start The fact that the Norges Bank’s target measure of inflation fell for the fifth month in a row in August, and is likely to remain steady at about half the Bank’s target rate over the next six …
The fact that the Swedish GDP indicator was nearly 2% above its pre-virus level in July puts a question mark over the wisdom of the Riksbank’s plan to exhaust its asset purchase envelope by end-2021. We think there is a rising chance that policymakers …
8th September 2021
Mamma Mia! ABBA are back! Of course, it could just be a coincidence that ABBA announced that they are re-forming the day after we released a Focus with a shameless ABBA pun in the title, but we’d like to think otherwise. We will resist the temptation to …
3rd September 2021
Post-pandemic recovery phase nearly over Data released this morning show that Swiss GDP is on track to re-gain its pre-pandemic level in Q3 and that inflation is creeping higher. Nonetheless, the near-term outlook is not as rosy as it was. Inflation is …
2nd September 2021
Housing market valuations in Sweden are even more stretched than on past occasions when the Riksbank has “leant against the wind” – that is, set policy tighter than needed to contain consumer price inflation. While we think the Bank is unlikely to raise …
1st September 2021
Do you want the good news or the bad news? Business surveys took centre stage on Wednesday morning, with strong parallels between the August readings of the Swiss Investor Sentiment Index and the German Ifo . Encouragingly, businesses in both countries …
27th August 2021
Swedish GDP (officially!) above pre-virus level and growth to pick up in Q3 The release of GDP data from Sweden this morning confirmed that the economy surpassed its pre-virus peak in Q2, and we expect output to make further gains in Q3. The 0.9% q/q …
Norges Bank gets its nose in front The Norges Bank’s “interim” August policy announcement on Thursday did not upset the form book, and the Bank left interest rates on hold at a record low of zero once again. (See here .) The Bank said that economic …
20th August 2021
Norwegian economy re-gained pre-virus peak in June The release of Q2 GDP data from Norway this morning confirmed that the mainland economy came within a whisker of re-gaining its pre-virus level in June. Growth is set to accelerate in Q3. The 1.4% q/q …
This morning’s decision by the Norges Bank to leave its policy rate on hold at a record low of zero was no surprise. Following the delay to the tightening cycle in New Zealand, the Norges Bank is back in pole position to be the first G10 central bank to …
19th August 2021
The SNB and the Riksbank will leave interest rates on hold throughout 2022 and 2023 and probably beyond, but the start of rate hikes by the Norges Bank is edging ever closer. (See here .) Once the tightening cycle in Norway begins, attention will …
16th August 2021
All eyes on the north Atlantic The world tends to only take notice of Iceland after spectacular events, be it the implosion of its banking sector or the explosion of a volcano . The country has been thrust into the spotlight once again recently following …
13th August 2021
Small rise in inflation will leave the Riksbank unfazed The slight pick-up in Swedish headline inflation in July was primarily driven by a rise in energy inflation. However, the fall in core inflation to its lowest level since 2014, means that the …
The Norges Bank is set to leave interest rates on hold at zero next Thursday (19 th August), but it will almost certainly start to raise them, and tighten macroprudential policy further, in September. Recall that the Norges Bank left the policy interest …
12th August 2021
Below-target core inflation will not prevent September rate hike The small increase in headline CPI inflation in Norway, and the bigger decrease in the Norges Bank’s target measure, will have no bearing on the near-term outlook for monetary policy given …
10th August 2021
A macroeconomist’s take on the Olympics Rather than just enjoying the spectacle of Norway’s Karsten Warholm storming to victory in the 400m hurdles this week, we found ourselves frustrated by the emphasis that sports reporters put on nominal rather than …
6th August 2021
Re-opening inflation peak appears to have passed While inflation in Switzerland is likely to rise further in the coming months, the anticipated bout of re-opening inflation may have already passed, and the SNB will not be fazed. The slight pick-up in …
2nd August 2021
The success of reduced working hour trials in Iceland was largely founded on adopting better working practices which, if embraced elsewhere, might offer no-cost ways of achieving better work-life balances. However, given that Iceland’s trials were centred …
30th July 2021
Global factors driving Swiss industry and the franc We would not overplay the importance of the second consecutive fall in the Swiss KOF Economic Barometer (July data were released this morning). After all, the indicator is still well above its long-run …
Swedish GDP growth set to accelerate further in Q3 The 0.9% q/q increase in Swedish GDP in Q2 was a touch weaker than our forecast (+1.0%) but stronger than the consensus (+0.7%). While the best of the rebound in the industrial sector may be behind us, …
29th July 2021
Next year’s games will be better for Team N&S While the Swedish women’s football team humbled the USA in the first game of their Olympic campaign this week, Switzerland and the Nordic countries don’t tend to excel in the summer games. Indeed, as shown in …
23rd July 2021
As elsewhere in mainland Europe, activity in Switzerland and the Nordic economies rebounded in Q2 as services sectors re-opened and the strength of global trade has buoyed exports. Our GDP forecasts for 2021 are generally above the consensus and output …
22nd July 2021
You guessed it: no change at the SNB The Swiss National Bank is nothing if not consistent. It has left interest rates unchanged since 2015 and is not shy about using the “copy and paste” function in its press releases. So it seems only natural that …
16th July 2021
Decline in inflation will reassure Riksbank The further fall in Swedish headline inflation in June is at odds with the recent data from the US and the UK, but came as no surprise given the recent drop in electricity prices. And with non-energy inflation …
14th July 2021
SNB policy tied to the ECB’s The adoption of a 2% inflation target by the ECB this week, and the announcement that the Bank will allow inflation to overshoot if needed, will not have been a he surprise to policymakers in Switzerland and the Nordics. …
9th July 2021
Subdued core inflation will not prevent September rate hike The small increase in headline CPI inflation and small decrease in the Norges Bank’s target measure of inflation will make no difference to the immediate outlook for monetary policy, not least …
Norwegian economy back in business The larger-than-expected rise in mainland Norwegian GDP in May indicates that the economy is back in business following the lifting of restrictions, and it is likely to have regained its pre-virus level in June. The …
7th July 2021
“Stockholm Street” or “Stockholm-enders”? This week saw the latest instalment of the political soap opera in Sweden. Having lost a “no confidence” vote on the 21 st June (see here ), the resignation of Prime Minister Stefan Löfven on Monday means the …
2nd July 2021
We think that the Norwegian krone will continue to strengthen against the euro over next year or so. This is despite our forecast for a pull-back in oil prices and reflects our view of the relative prospects for monetary policy in Norway and the …
1st July 2021
The Riksbank was always likely to maintain the status quo this morning, but against the backdrop of recent hawkish shifts by other central banks, notably the Fed, the focus was on how its thinking had shifted. The short answer is: not a lot. You did not …
Global developments driving the Nordic majors After last week’s seemingly counterintuitive drop in the NOK following the hawkish message from the Norges Bank (see here ), it was the turn of the Swedish Krona to apparently defy the laws of the market: the …
25th June 2021
After last week’s hawkish shift by the Fed, and the erasure of any doubt about the start of hikes by the Norges Bank , the Riksbank may also pencil a rate hike into its projections next Thursday (1 st July). However, policy action will be centred on the …
24th June 2021
The passing of this morning’s “no confidence” vote in Swedish Prime Minister Stefan Löfven has plunged Sweden back into a period of political purgatory. While the political outlook is unclear, the near-term macroeconomic implications are likely to be …
21st June 2021
Norges Bank trumped by the US Fed The Norges Bank laid its cards on the table this Thursday, all but confirming that it will start to raise its key interest rate from September. (See here .) In the event, it was overshadowed by the less anticipated news …
18th June 2021
While the Norges Bank left its policy rate on hold at a record low of zero once again this morning, it all but confirmed that it will raise rates in September – which would be well ahead of the RBNZ and the Fed, for example. We expect the NOK to gain …
17th June 2021
While the Norges Bank will start hiking in Q3, and we now expect the Fed to raise rates twice in 2023, developments in Frankfurt will continue to set the tone at the Swiss National Bank. Having left the policy rate on hold at -0.75% again this morning, …
The Delta variant does not appear to have taken hold in mainland Europe as yet, but the experience of the Alpha variety suggests that it could be dominant by the end of July. While this would be far from helpful, it should not prevent the euro-zone …
16th June 2021
A rate hike by the Norges Bank in September would make it the first G10 central bank to start to raise interest rates after the pandemic, by a comfortable margin. As a result, the NOK is likely to gain ground on the euro and the SEK by the end of the …
15th June 2021
Falling vegetable prices In a week when we learnt that core inflation in the US reached a 28-year high of 3.8% in May it is difficult to know what to make of the detailed discussion of vegetable prices in Statistics Sweden’s CPI press release . The good …
11th June 2021
We expect both the Swiss National Bank and Norges Bank to leave interest rates on hold next Thursday. But while rate hikes by the SNB are many years away, a tightening cycle in Norway is edging closer. Given that the SNB last changed interest rates in …
Underlying inflation subdued Inflation in Norway and Sweden was lower than expected in May, with core inflation falling in both economies. This will reassure Sweden’s Riksbank that it can keep its policy rate on hold, but we still think that the Norges …
10th June 2021
Rising global price pressures have pushed inflation up in Switzerland and Sweden this year, but their central banks look set to leave policy on hold. In contrast, inflation in Norway has been falling recently (see Chart 1) and yet its central bank is …
9th June 2021
Rising inflation won’t faze the SNB Inflation in Switzerland is likely to keep climbing over the coming months, but we still expect it to fall back next year. So the SNB looks set to keep interest rates on hold for a very long time. The rise in headline …
7th June 2021
New Riksbank Act proving to be Ingves’ kryptonite If somebody was to devise a superhero franchise featuring Riksbank Governor Stefan Ingves, they could do a lot worse than casting the proposed new Riksbank Act as his arch-enemy. Like a legislative version …
4th June 2021
