We expect Swedish manufacturing PMI to continue its recent see-saw pattern anddecline. However, we believe it will remain above the critical 50 line, indicatingcontinued expansion.
The most important Scandi event last week was, in our opinion, the RiksbankMinutes from the February Monetary Policy. We think the Minutes had a cleardovish twist with a stepped-up focus on inflation. Especially, we note that the usualhawk 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 ECBmeeting 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 whenthe next inflation data are published on 11 March. Therefore, we also stick to ourlong NOK/SEK strategy that we opened on 20 January at 104.80. We continue tohave a 109.50 target.
We expect Norwegian PMI to fall to 51.5 in February due to slightly slower growthin global manufacturing. We also expect actual manufacturing production to fall0.5% m/m in January, but this is due entirely to a correction following the strongupward 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 marketwill stay alert as the release will show if DN has needed to intervene to support theDanish krone.
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Danske Bank