In Sweden, the week ahead contains interesting information in the form of retail sales and trade balance data (both published on Friday).
In Sweden, the big question is if the Riksbank will follow in the footsteps of Norges Bank and revise its rate path lower next week. We believe that such speculation will gain momentum this week and continue to see upside for EUR/SEK and expect Swedish rates to tighten versus EUR rates especially in forward space. If the Riksbank actually makes a significant revision to its rate path in July, the EUR/SEK could spike above 9.25 and Swedish rates could drop significantly. We have revised our Riksbank rate forecast lower and see no rate hikes before the summer 2016.
In Norway focus turns to unemployment data. But the market will also continue to scrutinise the new significantly lower rate path from Norges Bank. We believe that the market has now adapted to the new rate path and the headwind to the Norwegian krone should abate now.
On 24 June, Norges Bank is tapping in the 10Y benchmark - it is selling NOK3bn in NGB 3.0% Mar '24. We recommend buying the bond at the auction against either swaps or Germany. Norges Bank is just ahead of the auction conducting the second of a series of buy-backs in the NGB 5.0% '15 benchmark. We again expect to see strong interest as it is attractive to roll further out on the NGB curve where the bonds are less expensive.
In Denmark, it will mostly be worth keeping an eye on the Q1 property sales figures from Statistics Denmark. Based on the monthly releases, we expect house prices to climb 1.5% q/q and 3.6% y/y and apartment prices 3.1% q/q and 9.0% y/y on a nationwide basis. Unlike the monthly data, the quarterly figures shed light on regional differences.
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