The key event in Sweden will be on Wednesday (at 09:30 CEST), when the Riksbank publishes its monetary policy decision.
We expect a small repo rate cut (10bp) to -0.35% and an expansion of the Riksbank QE programme of SEK30bn (to SEK70bn in total). We are very well aware that such a forecast is accompanied by considerable uncertainty. We are also aware that there are well established expectations in the market that the Riksbank will announce both a rate cut and more QE and we don't think that our call is very aggressive compared with our perception of consensus.
Uncertainty about the economic outlook in Norway is being exacerbated by the two main jobless measures diverging to an unusual extent: LFS unemployment has climbed relatively quickly, while the registered unemployment data from the NAV have risen more moderately. Therefore, we estimate LFS unemployment was unchanged at 3.9% in February (January-March). We estimate retail sales climbed to 0.4% m/m in March, in which case private consumption should show growth of around 0.5% q/q in Q1 - not exactly boom time but not a crisis either. We also expect Norges Bank to continue buying kroner at a rate of NOK700m a day in May.
In Denmark, we can look forward to March unemployment and February employment figures. We are also set to hear from the property market, with Statistics Denmark releasing housing prices for February. Data from website Boligsiden and estate agent chain home point to increases in both house and apartment prices.
Otherwise, focus will continue to be on EUR/DKK that last week continued to edge lower after it has been trading at the highest levels since 1999 end March. The move lower in EUR/DKK most likely reflects that the "dividend season" for Danish listed companies is now more or less over. But it rmight also reflect intervention support from the Danish central bank.
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