In Sweden, industrial and service production (incl. industrial order data) and household consumption will be published. We expect industrial production to post a strong rebound. Swedish PMI is also released.
We take a closer look at the market impact of the Riksbank decision last week. In brief we 1) like to buy the SEK at the current level, 2) we expect a further flattening of the money market curve, 3) the yield curve is expected to flatten 5-Year/10-Year and finally we recommend to buy 5y Swedish covered bonds.
In Norway, interest will centre on the September figures for manufacturing production, the first hard data for a month that, according to the media, was all about redundancies in oil-related industries. We anticipate a fall of 1.3% m/m after the surprisingly big rise of 1.0% in August. We expect that the PMI indicator will drop further to 49.2 in October from 49.4 in September, reflecting the weaker outlook for the oil industry and the euro area.
The Norwegian market is now pricing a very high probability of a rate cut at the December meeting, which makes the next regional network report and oil investment survey out in four weeks time pivotal. The current Norges Bank model for the rate path has, in our view, a hard time explaining the current market prices. But that said, Norges Bank has previously surprised to the dovish side.
In Denmark, Statistics Denmark will be releasing housing prices for August. Viewed as a three-month average, we expect house prices to climb 1.0% from March-May to June-August, and apartment prices by 2.5%. The housing market is currently one of the bright spots in the Danish economy, buoyed by continued low interest rates and rising employment. The upcoming week also offers October data for repossessions and bankruptcies, and the Nationalbank's currency reserve data for October, which will be interesting in the light of the strong krone and the central bank's decision to intervene marginally last month.
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