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Swiss economy already putting weak start to 2021 behind it Data released this morning confirmed that the Swiss economy started 2021 on the back foot following a tightening in virus-related restrictions. However, activity will have gathered pace in Q2. The …
1st June 2021
Swiss government calls time on EU talks It has been an eventful week in the news in Switzerland, with a placing in the Eurovision Song Contest for the first time in 33 years, a fighter jet crash (pilot uninjured, plane less so), and the announcement that, …
28th May 2021
While the breakdown in Treaty talks between Switzerland and the EU makes the outlook for Swiss exporters more uncertain, we doubt that the lasting economic impact will be very big. Yesterday’s news that the Swiss government has walked away from talks with …
27th May 2021
The Norges Bank has a history of beginning to tighten policy earlier than the ECB and we think it will follow that pattern again this year. Meanwhile, although it’s not the most likely scenario, we think that financial markets are under-estimating the …
Please entertain me, Statistics Denmark Statistics Denmark’s website is always a good place to start if you’re looking for some off-the-wall statistics to liven up an otherwise data-light week, and this week was no exception: we learned that the average …
21st May 2021
While the vaccine rollout in Europe has finally kicked into gear, the legacy of the slow start means the EU is more exposed than the UK or the US if the Indian variant spreads quickly amongst the unvaccinated. The vaccine rollout on the continent has gone …
18th May 2021
Economic analysis at the cutting edge Given that the Riksbank left its policy settings on hold in April, the minutes from the meeting (which were released this week) were never going to be a rip snorter. That said, we were keen to pore over them for clues …
14th May 2021
The Riksbank will look through the recent pick-up in consumer price inflation in Sweden, which rose above the Bank’s 2% target in April for the first time since May 2019. After all, the energy-driven increase in the headline CPIF rate will be temporary, …
13th May 2021
Energy-driven boost to inflation to prove temporary The energy-driven increase in Swedish inflation in April is likely to be temporary and will not trouble the Riksbank (even as bicycle prices keep on climbing). That said, house price inflation is likely …
12th May 2021
Tough start to the year, but outlook brightening The weaker-than-expected 1.0% q/q decrease in Norwegian mainland GDP in Q1 confirmed that the economy slipped behind its Swedish counterpart at the start of the year, and suggests that it is now unlikely to …
Exchange rate effects mask pockets of home-grown price pressures Exchange rate effects pulled Norway’s core inflation rate back down to target in April, and will continue to exert downward pressure over the coming months. However, pockets of home-grown …
10th May 2021
What’s Swedish for “gangbusters”? Preliminary GDP data released last week indicated that Swedish output had already surpassed its pre-virus level in March – faster than it takes many to assemble IKEA furniture. In the meantime, the strong set of activity …
7th May 2021
As expected, the Norges Bank left its policy rate on hold at a record low of zero once again this morning but remains on track to be the first advanced central bank to start to raise interest rates, later this year. Given that the Bank tends not to be …
6th May 2021
End to deflation won’t faze the SNB April marked the end of the recent bout of deflation in Switzerland, and the headline rate is likely to climb higher over the coming months. Meanwhile, further confirmation that the Swedish economy is firing on all …
5th May 2021
Riksbank and Fed singing off similar hymn sheets As expected, the Riksbank left its repo rate and other policy settings unchanged on Tuesday. (See here .) However, the chunky upward revisions to its near-term GDP forecast were swiftly vindicated by the …
30th April 2021
The Norges Bank is set to leave rates on hold at zero next Thursday, but the countdown to lift-off is ticking and tighter macroprudential policy to counter momentum in the housing market looms. Having slashed the policy interest rate by 150bps to a record …
29th April 2021
Economy came roaring out the blocks, and is getting into its stride The stronger-than-expected increase in Swedish GDP in Q1 means that the economy has already largely regained its pre-virus peak. Meanwhile, the jump in the ETI in April suggests that the …
The decision by the Riksbank to leave the repo rate and its other policy settings unchanged today will have come as a surprise to no one. While policymakers are increasingly optimistic about the near-term outlook for the economy, they are clearly in no …
27th April 2021
EC offering carrots, following failure of the stick The long-running saga over a new bilateral “framework agreement” between Switzerland and the EU is back in the news, with the current Swiss President, Guy Parmelin, set to meet his European Commission …
23rd April 2021
The Riksbank is all but certain to leave its repo rate on hold next Tuesday (27 th April), and will stick to the plan to spend the entire SEK 700 billion asset purchase envelope by the end of the year. The stage is set for a prolonged period of policy …
20th April 2021
The fact that the US Treasury refrained from calling Switzerland a currency manipulator in its latest report lowers the temperature in US-Swiss relations but doesn’t change the policy equation for the SNB. Having designated Switzerland a currency …
19th April 2021
As elsewhere in mainland Europe, the slow vaccine rollout means that the rebound in domestic activity is unlikely to get underway in earnest until Q3. Denmark is a noteworthy exception; its comparative success in containing the virus has allowed it to …
16th April 2021
Public health officials calling the shots This week’s decision by Denmark to discontinue usage of the AstraZeneca vaccine understandably took the headlines. (Incidentally, note that the jab is now officially known as ‘Vaxzevria’, which could be a …
The partial unwinding in the reflation trade in recent weeks has stopped the decline in the Swiss franc in its tracks. Having depreciated against both the US dollar and the euro since the start of this year, the franc rose against both currencies in …
14th April 2021
The delayed start to deliveries of the J&J vaccine is yet another blow to the rollout in continental Europe and on its own could delay things by at least one month compared to a situation in which the recent pace of vaccinations is sustained. This Update …
Nearing the Riksbank’s target Swedish inflation rose closer to the Riksbank’s 2% target in March, in line with expectations. As it should only breach the target temporarily, we continue to expect the Riksbank to keep the repo rate on hold for the …
The IMF gives Switzerland tops marks for effort The IMF completed its latest Article IV consultation with Switzerland this week. The concluding statements of such missions are typically rather anodyne but this one included some linguistic flourishes. For …
9th April 2021
Persistently above-target inflation to pave way for rate hikes The fact that core inflation in Norway came in above target for the fifteenth month in a row in March came as no surprise. However, it underlines that the Norges Bank is in a very different …
Economy started 2021 on the front foot Monthly GDP data from Sweden for February indicate that output it is all but certain to have expanded in Q1. The recent surge in virus cases casts a cloud on the government’s plans to ease restrictions again soon, …
8th April 2021
The comparative success that the Danish government has had in handling COVID has allowed it to start to re-open the economy, despite the painfully slow progress on the vaccine front. Most economies in Europe are not as well placed, however, so their …
6th April 2021
Swiss manufacturers are too busy for pranks The spaghetti-tree hoax of 1957, which purportedly showed a Swiss family harvesting spaghetti from a tree, is widely regarded as one of the most successful April Fools’ pranks and (perhaps unfairly) exposed the …
1st April 2021
Looming pick-up in inflation won’t faze the SNB Swiss inflation looks set to continue its upward trend over the coming months, but with temporary factors likely to fade in H2, and underlying price pressures likely to remain much weaker, this won’t change …
Ending Q1 on the front foot The latest business surveys indicate that Sweden and Switzerland ended Q1 on strong footings, helped by buoyant conditions in their manufacturing sectors. The rise in Sweden’s ETI in March, from 103.8 in February to 105.3, …
30th March 2021
Denmark plots a course to re-opening Sweden announced this week that it will allow vaccinations using the AstraZeneca jab to resume, albeit only for the over-65s, but both Norway and Denmark kept the temporary suspensions in place. It has not all been …
26th March 2021
This morning’s decision by the Swiss National Bank to keep its policy settings unchanged came as no surprise. The prospect of further falls in the franc should allow the Bank to largely stay out of the FX market, but the policy rate will remain rooted at …
25th March 2021
The EU’s tougher stance on vaccine exports might help to secure some concessions and additional doses from the UK. But it will do nothing to combat vaccine hesitancy in parts of the bloc and is unlikely to significantly boost the rollout in Europe. This …
24th March 2021
Norges Bank’s Intentions (4,4): RATE HIKE The Norges Bank’s decision to leave its policy rate on hold at zero this week was never really in doubt. However, as we expected, policymakers shifted to a more hawkish stance and prepared the ground for the start …
19th March 2021
The Swiss National Bank will have cheered on the recent fall in the franc against the euro. However, policymakers are unlikely to offer up any surprises at the policy announcement next Thursday. Given that the SNB last changed interest rates in January …
18th March 2021
As we expected, the Norges Bank laid the groundwork this morning for the start of a tightening cycle, later this year. But we think it will raise interest rates sooner and faster than it currently projects. This morning’s decision by the Norges Bank to …
A new wave of coronavirus cases in Europe, and the pause in usage of the AstraZeneca vaccine, raises the risk that the EU will fall even further behind the UK and US in its recovery from the pandemic. Europe is falling behind in the race between …
17th March 2021
Unlikely to rise much further Swedish inflation came in weaker than expected in February, and we continue to expect the Riksbank to keep the repo rate on hold for the foreseeable future. The fall in the headline CPIF inflation rate in February, from 1.7% …
15th March 2021
The recent technical adjustments to the Danish Nationalbank’s monetary toolkit simplify the policy framework and are not intended to alter the policy stance. But with the Danish krone at its strongest level against the euro since September 2017, and at a …
12th March 2021
Oh no, not more ECB QE! The SNB would have been forgiven for being a bit perturbed by the dovish message from the ECB yesterday that it expects the pace of its asset purchases to be “significantly higher” in the coming quarter. After all, the prospect of …
The increases in Swiss, Swedish, and Norwegian government bond yields over the past month or so have illustrated the extent to which smaller bond markets get dragged around by global conditions. As has been the case since the start of the pandemic, the …
11th March 2021
The Norges Bank will probably leave its key interest rate on hold at zero next Thursday, but we expect it to adopt a much more hawkish tone than it has up to now. It might also announce a re-tightening of macroprudential policy to try to counter momentum …
Core inflation to fall but remain high Core inflation in Norway came in above target again in February, and while we expect it to fall in the coming months, home-grown price pressures should support the rate later in the year as activity picks up pace. …
10th March 2021
Norway well placed, despite weak patch The latest tightening of virus-related restrictions in Norway will weigh on domestic activity in the near term. However, Norway remains comparatively well placed, and we expect the Norges Bank to be the first major …
9th March 2021
Swiss franc seems set to fall further Swiss inflation came in below expectations in February (see here ), but the period of deflation is likely to end soon. As elsewhere, the latest manufacturing PMI pointed to rising price pressures from disruption and …
5th March 2021
Looming pick-up in inflation won’t faze the SNB Swiss inflation surprised on the downside in February, but temporary forces look set to push it higher over the coming months. However, with underlying price pressures likely to remain much weaker, the SNB …
3rd March 2021
The underwhelming vaccine rollout in Europe will probably delay the easing of restrictions and means that the best of the vaccine bounce will be pushed into Q3. That said, the planned EU-wide vaccine passport offers a lifeline for tourist-dependent …
2nd March 2021
