In Sweden, the Riksbank monetary policy decision (due Thursday at 09:30 CET) will dominate the week ahead and, with a high degree of confidence, we expect no change in the repo rate.
This week Sweden is also tapping in the 5Y segment and we believe that the spread to Bunds is attractive given the recent widening to 100bp
We estimate that Norwegian core inflation held at 2.0% y/y in January, which is roughly in line with Norges Bank's projections in the December monetary policy report. This would put an end to any argument to revise down the interest rate path in the next report at the end of March, so pushing up yields and lifting the krone.
Norges Bank is tapping its 5Y bond (maturity 22 May 2019) on Tuesday 11 February with NOK3bn. This 5Y bond is currently trading in the middle to high end of the range over the past year, in terms of yield spreads relative to both German and Swedish government bonds. We believe this offers reasonably good value compared with other solid sovereign government bonds.
We continue to see upside for NOK/SEK based on relative core inflation and relative growth performance in Q4 13.
We still expect to see an independent Danish rate hike over the next couple of months. But timing is difficult and we continue to argue that the Danish CITA is too steep relative to the EONIA curve.
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