The main Swedish event is NIER’s consumer and business confidence surveys. Wedon’t expect any major leaps in the data and some small improvement is even in theoffing (given the main components in PMI).
We don’t see much reason to expect any major changes in Swedish borrowingprojections (released 19 June) compared with the February forecast (SEK67bn 2014and SEK17bn next year).
We expect Norges Bank to revise the interest rate path down by around 20bp in 2015and 20-25bp in 2016 and 2017. We do, however, expect the path to continue toindicate a certain chance of a rate hike in 2015, which is more aggressive than marketexpectations. But still a downward revision of this magnitude should push marketrates even lower and might also temporarily weigh on the NOK.
Given that the negative carry on DKK in the FX forward market has beensignificantly diminished since the ECB meeting, we should expect EUR/DKK to edgefurther down this week. We should probably see EUR/DKK dropping “well” below7.45 before Nationalbanken would even consider intervening in the FX market.
Read the full report: FX Daily