Filtered by Subscriptions: Nordic & Swiss Economics Use setting Nordic & Swiss Economics
Industry in top gear, as supply constraints come into view The strong set of manufacturing PMIs for February indicates that industry remains in rude health. That said, as elsewhere, there are signs of supply problems and rising price pressures. The …
1st March 2021
Not immune to the bond market rout As elsewhere, the sell-off in the bond market hit the headlines in Switzerland and the Nordics this week. In keeping with the trend over the past year or so, the Norwegian 10-year yield has tracked that in the US higher, …
26th February 2021
Activity proving resilient to lockdown The 0.3% q/q expansion in Swiss GDP in Q4 was slightly better than expected and means that output was just 1.6% smaller than in Q4 2019. (See Chart 1.) Tighter virus-related restrictions and a renewed slump in the …
The recent fall in the Swiss franc against the euro will be music to the SNB’s ears, and we think that there is plenty of scope for the currency to drift lower over the coming years. Having traded in a narrow range around CHF 1.08 over the past six months …
24th February 2021
Norges Bank set to blink first In case you missed it, we changed our view on the Norges Bank this week. Having previously forecast the key interest rate to remain on hold into 2023, we now expect the Bank to be the first advanced central bank to begin …
19th February 2021
Rising above target, but only temporarily Swedish inflation rose sharply, as expected, in January and is set rise above the Riksbank’s 2% target in Q2. In any case, policymakers have signalled that they will look through any temporary breach of the …
18th February 2021
We forecast the Norges Bank to be the first advanced central bank to begin raising interest rates, in the second half of this year. This will further bolster the krone, which we expect to be the best-performing G10 currency in 2021, and will drive the …
17th February 2021
Comparatively well-placed The slightly smaller-than-expected 0.6% q/q increase in Danish GDP in Q4 left the economy 3.1% smaller than it was in Q4 2019. (See Chart 1.) Although activity is likely to slow in Q1 – on the back of tighter virus restrictions …
15th February 2021
Higher oil prices will provide a boost to energy inflation in most countries over the coming months (see here ), including in Switzerland and the Nordics. In Sweden and Norway, the energy component will be additionally boosted by a spike in electricity …
12th February 2021
Attention shifts from repo rate to asset purchases As expected, the Riksbank left its repo rate and other policy settings unchanged on Wednesday morning. (See here .) The Bank was justifiably upbeat about near-term prospects for the economy given the …
Norway still better placed than most The larger-than-expected increase in Norwegian mainland GDP in Q4 confirms that Norway is faring much better than its European peers. Activity is likely to have weakened at the start of 2021, but higher oil prices and …
This morning’s announcement that the Riksbank left its policy settings unchanged will have come as a surprise to no one. Policymakers are in no rush to raise the repo rate from zero, but there are likely to be differences in opinion about how to proceed …
10th February 2021
Norwegian core inflation to fall back to target Core Norwegian inflation edged down in January and will continue to fall back this year as the inflationary boost from previous krone weakness fades. The Norges Bank will be in no rush to raise interest …
Swedish economy proving resilient Data released this week have provided welcome signs that the Swedish economy is holding up better than we feared. The manufacturing sector remains in rude health, helped by a pick-up in global trade flows. While the …
5th February 2021
The Riksbank is highly likely to leave its repo rate and other policy settings on hold next Wednesday (10 th February), but we expect it to beef up its asset purchase programme again before long. Recall that the Riksbank left its repo rate unchanged at …
3rd February 2021
Industrial sector resilient at the start of the year The strong set of January manufacturing PMIs from Switzerland and the Nordics indicates that industry continued to cushion the blow from virus restriction-driven declines in services activity at the …
1st February 2021
Swiss recovery shifts into reverse The plunge in the Swiss KOF Economic Barometer in January, from 104.1 in December to 96.5 (well below even our below-consensus forecast), suggests that the reintroduction of a nationwide lockdown is starting to bite, and …
29th January 2021
Bucking the weak trend at the start of 2021 The rise in Sweden’s Economic Tendency Indicator (ETI) in January was a welcome surprise and shows that the manufacturing sector remains in rude health. That said, retail is struggling, and with deeper …
28th January 2021
Having experienced some of the smallest falls in output in Europe in 2020, GDP in Switzerland and the Nordics is likely to rise back to pre-virus levels in H2 2021 – about a year ahead of the euro-zone. As elsewhere in Europe, the pace of vaccine …
27th January 2021
Sweden extends (but doesn’t tighten) restrictions Although the number of new daily infections in Sweden has come down over the past week, it remains high by Nordic standards. It is therefore no surprise that the Swedish government announced a two-week …
22nd January 2021
As expected, the Norges Bank left its policy rate on hold at a record low of zero once again this morning and reiterated that it “will most likely remain at today’s level for some time ahead”. This supports our view that, while we expect Norway to be …
21st January 2021
A strong Q4 & a tough Q1 This week’s data from Sweden and Norway add to the signs that both economies ended Q4 on a decent note and outperformed even the best-performing major euro-zone economies in 2020. Mainland GDP in Norway contracted by less than …
15th January 2021
The latest data suggest that activity was more resilient in Q4 than we had previously feared, with GDP in Norway and Sweden likely to have grown relative to the previous quarter, for example. That said, mobility data indicate that retail activity was hit …
14th January 2021
The Norges Bank will almost certainly leave its key interest rate on hold at zero next Thursday, but there is an outside chance that it could start to re-tighten macroprudential policy to tame the housing market. Having slashed the policy interest rate by …
Our working assumption is that the vaccine rollout proceeds fast enough for governments to start lifting restrictions in April and that the majority are lifted during May and June. This Update sets out these assumptions in more detail and discusses the …
13th January 2021
Norway to remain ahead of the pack The smaller-than-expected fall in mainland Norwegian GDP in November shows that activity was reasonably resilient to tighter virus-related restrictions and was well placed coming into 2021. While Sweden also probably …
12th January 2021
Norwegian inflation to fall sharply this year While core Norwegian inflation edged further above target in December, it is set to fall back swiftly this year and so the Norges Bank will be in no rush to raise interest rates. The rise in Norwegian headline …
11th January 2021
Q4 not as bad as first feared… The manufacturing PMIs from December (released on Monday morning), suggest that the industrial sectors in Switzerland and Sweden ended 2020 on a high, helped by robust demand from Asia. (See here .) The Swiss PMI rose to a …
8th January 2021
We expect both the Swedish krona and the Norwegian krone to appreciate against the euro and the dollar in 2021. However, in contrast to 2020, we expect the NOK to outperform the SEK slightly this year. The fortunes of the Swedish krona and Norwegian krone …
7th January 2021
While it’s still early days, the underwhelming start to vaccinations in mainland Europe lends support to our view that governments won’t lift most of the restrictions until May/June (see here ), and the uneven start suggests that some countries will make …
Deflation on the way out, but SNB will keep policy unchanged Swiss inflation is likely to climb out of deflationary territory over the coming months. However, it is still set to remain very weak over the coming years, and does not change the picture for …
5th January 2021
Industrial sector carried momentum into 2021 The strong set of December manufacturing PMIs from Switzerland and the Nordics indicates that industry started 2021 on the front foot, supported by robust activity in Asia. This bodes well for Q1 and will have …
4th January 2021
Yesterday’s approval of the first vaccine by European authorities marked the start of the roll-out of COVID-19 vaccines in the EU, which we expect to lead to a lifting of restrictions in Q2. However, the gradual pace at which production is being ramped …
22nd December 2020
US Treasury not on the SNB’s Christmas card list The SNB’s final policy meeting of the year (see here ) was overshadowed by the news on Wednesday that the US Treasury designated Switzerland, along with Vietnam, a “currency manipulator” in its latest …
18th December 2020
As was widely expected, the Norges Bank left its policy rate on hold at zero this morning. However, it brought forward the projected start of rate hikes and signalled that it will retighten macroprudential policy next year, which confirms our view that …
17th December 2020
This morning’s decision by the Swiss National Bank to keep its policy settings unchanged was pretty much a foregone conclusion. Looking ahead, the SNB will brush off being branded a ‘currency manipulator’ by the US Treasury but is still likely to be less …
As well as being a game-changer for economic prospects next year (see here ), the positive news on the vaccine front has also helped to ease the upward pressure on the Swiss franc against the euro. The franc briefly dropped to its lowest level of 2020 …
11th December 2020
Riksbank keeps all options on the table The minutes from the Riksbank’s policy meetings are never what one would call page-turners. However, the account from the November meeting (released on Monday) was a bit more interesting than usual given that two of …
We do not expect the Swiss National Bank or the Norges Bank to throw up any festive surprises at their final policy announcements of the year next Thursday (17 th December). Vaccines point to brighter times next year, but we still think that both will …
10th December 2020
Core inflation in Norway to drift lower next year The sharp fall in Norwegian inflation in November was skewed by energy effects, but the decline in the core rate underlines that policymakers will be in no rush to raise rates. Meanwhile, the persistent …
Norway to get away lightly in Q4 The stronger-than-expected increase in mainland Norwegian GDP means that the economy will avoid contracting in Q4 and confirms that it will experience a comparatively modest drop in output in 2020. However, the increasing …
9th December 2020
Swedish services PMI defying gravity, for now The strong set of manufacturing PMIs from Switzerland and Sweden in November mirrored the survey from Germany and did not come as a huge shock. The pick-up in Sweden’s services PMI, released yesterday, was …
4th December 2020
Deflation on its way out, but SNB will keep policy unchanged The current period of deflation in Switzerland will start to ease in early 2021, and the headline rate is likely to edge back into positive territory by March. However, this won’t be a …
2nd December 2020
Industrial boom to help offset services slump The strong set of manufacturing PMIs from Switzerland and the Nordics in November suggests that the industrial rebound gathered momentum in Q4, in keeping with the picture in German industry. This will help to …
1st December 2020
Is Switzerland “doing a Sweden” in Q4? The decline in the KOF Economic Barometer in November adds to signs that the rebound in Swiss GDP shifted into reverse in Q4. However, given the government’s decision to resist a nationwide lockdown, activity in the …
30th November 2020
Sweden in the limelight It has been a Sweden-centric week, rounded off with a raft of economic data released this morning. The most noteworthy of which was the second reading of Q3 GDP, which was revised up from the initial estimate (+4.9% q/q versus …
27th November 2020
Following the run of positive news on the vaccine front, we now expect Switzerland and the Nordic economies to regain pre-virus levels in late 2021. Nonetheless, policymakers will be in no rush to tighten. We recently upgraded our economic forecasts for …
The announcement this morning by the Riksbank that it has left the repo rate on hold at zero was never in doubt, and positive news on the vaccine front means that we no longer expect it to cut back into negative territory next year. However, the expansion …
26th November 2020
Minkgate rumbles on in Denmark The political wrangling in Denmark following the outbreak of COVID-19 in the country’s mink farms shifted up a gear this week. The main point of contention remains that the government did not have the legal basis to order …
20th November 2020
The Riksbank is likely to leave its repo rate on hold at zero next Thursday (26 th November). But with the economy heading south, and the ECB gearing up to ease again, we think there is a good chance that policymakers will take the opportunity to expand …
19th November 2020
