We expect the Swedish manufacturing PMI to continue its recent see-saw pattern and decline. However, we believe it will remain above the critical 50 line, indicating continued expansion.
The most important Scandi event last week was, in our opinion, the Riksbank Minutes from the February Monetary Policy We think the Minutes had a clear dovish twist with a stepped-up focus on inflation. Especially, we note that the usual hawk Mr. Jansson seems to have turned his focus to inflation developments.
The Swedish krona got a boost from the strong GDP numbers and with the ECB meeting coming up, further performance this week will not be a surprise. However, we believe any gains will be short-lived if we see another low inflation number when the next inflation data are published on 11 March. Therefore, we also stick to our long NOK/SEK strategy that we opened on 20 January at 104.80. We continue to have a 109.50 target.
We expect Norwegian PMI to fall to 51.5 in February due to slightly slower growth in global manufacturing. We also expect actual manufacturing production to fall 0.5% m/m in January, but this is due entirely to a correction following the strong upward surge of 1.7% m/m in December.
Danmarks Nationalbank will release February's currency reserve figures. EUR/DKK remained on a relatively high level through February: hence, the market will stay alert as the release will show if DN has needed to intervene to support the Danish krone.
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