Daily Macro Brief. Monday 30 October 2017 Jeanette Strøm Fjære, DNB Markets

Transcription

1 Daily Macro Brief Monday 3 October 217 Jeanette Strøm Fjære, DNB Markets

2 Overview Key events today Norway: Retail sales are expected to rise by.25 m/m in September, after declining by.6% in August USA: The core PCE deflator is expected to remain unchanged at 1.3% y/y in September, well below the Fed s target at 2%. Despite this, we expect the Fed to raise the Fed Funds by 25bps at the December meeting. Personal spending is expected to rise by.8% m/m in September, while personal income is expected up.4% m/m EMU: The Economic Sentiment Indicator is expected to edge up.3p to in October, thus indicating solid pace of growth in the euro area Highlights the rest of the week: US President Donald Trump is expected to announce his nominee for new Fed Chair sometime this week. Tuesday: Bank of Japan meeting and euro area flash GPD for Q3 Wednesday: FOMC meeting and ISM for manufacturing. Thursday: Bank of England Super Thursday Friday: Non-farm payrolls in the US See the attached calendar for details Back to index Daily Macro Brief page 2

3 Overview Key events since last report Norway: Consumer confidence fell by 3.1p to 9.1 in October, as households became less optimistic about the nations economy. Level still high, pointing towards a positive development in household demand USA: GDP rose by 3% q/q a.r. in Q3, while we and consensus had expected 2% and 2.5% respectively. Positive contributions from inventories and net exports, while domestic demand came in a bit soft, especially household demand. Sweden: Retail sales increased by.8% m/m in September, beating expectations by.7pp. Q3 very strong, indicating a solid contribution from household demand to GDP growth in Q3 Also included in today s report: Previews on FOMC-meeting, non-farm payrolls, ISM Manufacturing, Bank of England meeting and new Fed Chair. For details on market developments, see here See the attached calendar for other key figures Back to index Daily Macro Brief page 3

4 Norway: Consumer sentiment fell in October Consumer confidence fell 3.1p to 9.1 in October. Level is still almost 1 standard deviation above the historical average. Driven by a decline in households view on the nation s economy, while their view on the personal economy was unchanged. Assessment: Still strong consumer confidence pointing to stronger consumption growth in 217, but after a weak 216. Not very strong correlation though Norway: Consumer confidence ForbrukerMeteret (Opinion), w ith long-term avg Source: ForbrukerMeteret fra Opinion/DNB Markets Norwegian consumer confidence Jul-17 Aug-17 Sep-17 Oct-17 m/m, pp Total Personal economy prev. 12m Personal economy next 12m* Norway's economy last 12m Norway's economy next 12m* Unemployment in 12m* Saving in 12 m* Household finances * Part of the total index Back to index Daily Macro Brief page 4

5 Norway: Less optimistic on nation s economy Norway: Consumer confidence ForbrukerMeteret (Opinion Perduco) Norway: Consumer confidence ForbrukerMeteret (Opinion Perduco) Personal economy, last 12m Next 12 months Nation's economy Unemploym. in 12m (inv, rha) Source: Opinion Perduco/DNB Markets Source: Opinion Perduco/DNB Markets Back to index Daily Macro Brief page 5

6 USA: GDP-growth better than expected in Q3 GDP rose by 3.% q/q saar in Q1. This was better than consensus at 2.5% and our forecast at 2.% Household consumption grew by 2.4% while private investments increased by 1.5% - held down by a decrease in housing (-6.%), but also business investments grew slower than in the past two quarters Net exports added.4pp to growth, as exports rose and imports fell Inventories added.7pp to growth PCE deflator (core) rose 1.3% q/q saar, up from.9% in Q2 Assessment: Better than expected, but that was mainly due to larger contribution from inventories and net exports than we had pencilled in. Domestic demand was on the soft side, in particular household demand USA: GDP Per cent -1 Q3 27 Q3 212 Q3 217 q/q saar y/y Back to index Daily Macro Brief page 6

7 USA: GDP, details National Accounts Per cent q/q, saar Per cent, y/y Q4 216 Q1 217 Q2 217 Q3 217 Q1 217 Q2 217 Q3 217 Private cons um ption Private inves tm ents Bus ines s Hous ing Stock change (% contribution) Public demand Exports Im ports Net exports (% contribution) Gros s Dom es tic Product GDP Deflator PCE deflator, core Source: Thom s on Datas tream/dnb Markets 1. USA: Growth contribution GDP (Not annualized, per cent) Core PCE price index Q3 216 Q1 217 Q3 217 Priv.cons Investm. Stocks Gov. cons Net. exp. GDP.5. Q3 27 Q3 212 Q3 217 q/q s.a.a.r. y/y Back to index Daily Macro Brief page 7

8 Preview: New fed Chair appointment likely this week USA: Trump to appoint new Fed Chair Five candidates: According to Trump the shortlist consist of: Janet Yellen (71), Jerome Jay Powell (64), Kevin Warsh (47), John Taylor (7) and Gary Cohn (57). Senate will have to confirm the chosen candidate by February 3 next year. Hawkish or dovish? Financial Times has reported an analysis conducted by Prattle, where all above candidates (and some more) are ranked. The AI-analysis is based on 616 speeches, papers and interviews and candidates are ranked based on market reactions to their speeches etc. Bases on only 1 documents, Cohn is by far found as the most hawkish candidate. Powell is regarded as the only dovish candidate. Yellen is regarded as somewhat hawkish, while Warsh, and in particular Taylor, are found to be more hawkish. Probabilities: PredicIt: Powell is strongly in the lead, followed by Taylor, Yellen and Warsh. Both FT and Economist have argued for a reappointment of Janet Yellen. Market reactions: Appointment of a candidate regarded as hawkish will likely lift market rates and strengthen the USD. Back to index Daily Macro Brief page 8 8

9 Preview: New fed Chair appointment likely this week USA: Jerome Powell is the favourite Jerome Hayden «Jay» Powell (64). Graduated from Princeton and Georgetown Universities in 1975/79. A Republican with centrist ties. Joined the Board of Governor of the Fed in 212. Previously at Bipartisan Policy Center, where he focused on fiscal issues. From he was partner at The Carlyle Group. Assistant secretary at the Treasury Department under G. H. W. Bush. Also worked as a lawyer and investment banker in New York. According to Washington Post, Powell has really impressed Treasury Secretary S. Mnuchin. Back to index Daily Macro Brief page 9 9

10 Preview: FOMC-meeting 31October & 1 November No changes at this meeting The previous meeting (19&2 September): Low inflation causes concern From the Minutes: many participants expressed concern that the low inflation readings this year might reflect not only transitory factors, but also the influence of developments that could prove more persistent This meeting: No changes at this meeting Only press release at 19: GMT+1 No press conference, macro forecasts or updated dot-chart Assessment: Financial conditions remain strong despite a somewhat stronger USD recently. Business confidence has strengthened further, but hard data have been fairly stable. Hurricane effects have disturbed labour market data. Hence, the FOMC will not put much weight on these data. GDP grew strongly in Q3. Core inflation has surprised to the downside. FOMC likely to be concerned of the declining trend for inflation, but will probably put more weight on medium term expectations and indicate that a December hike is likely. Back to index Daily Macro Brief page 1

11 Preview: FOMC-meeting 31October & 1 November USA: Strong business confidence USA: Business confidence 3 8 Sep-2 Sep-7 Sep-12 Sep ISM manuf. ISM non-manuf. NFIB (rha) USA: Industrial production Seasonally adjusted volume change, m/m % -1. Sep-14 Sep-15 Sep-16 Sep-17 Total Manufacturing Oct-77 Oct-87 Oct-97 Oct-7 Oct USA: Trade weighted USD Actual and 4y average Source: Thomson Datastream / DNB Markets USA: Bank loans Per cent, y/y Aug-14 Aug-15 Aug-16 Aug-17 Commercial & Ind. Mortgages Consumer Back to index Daily Macro Brief page 11

12 Preview: FOMC-meeting 31October & 1 November USA: Modest consumption growth USA: Personal consumption Per cent, m/m Sep-15 Mar-16 Sep-16 Mar-17 Sep USA: Oil and gasoline price Oct-13 Oct-14 Oct-15 Oct-16 Oct-17 Oil, WTI, USD/b Nominal Real Regular, USD/gallon (rha) USA: House prices Per cent m/m -.4 Aug-14 Aug-15 Aug-16 Aug-17 FHFA S&P Case Shiller USA: Consumer Confidence and consumption 25 Sep-7 Sep-9 Sep-11 Sep-13 Sep-15 Sep-17 Expectations Consumption, q/q % (saar) (rha) Back to index Daily Macro Brief page 12

13 Preview: FOMC-meeting 31October & 1 November USA: Lower inflation and unemployment USA: Core inflation Per cent, y/y. Sep-7 Sep-9 Sep-11 Sep-13 Sep-15 Sep-17 PCE CPI Fed's target USA: Inflation expectations Ten year, break even. Per cent. Oct-7 Oct-9 Oct-11 Oct-13 Oct-15 Oct-17 USA: Labour market Sep-7 Sep-9 Sep-11 Sep-13 Sep-15 Sep-17 Non-farm payrolls, m/m, 1 Unemployment (rha) USA: Initial Jobless Claims Seasonally adjusted Oct-16 Dec-16 Feb-17 Apr-17 Jun-17 Aug-17 Oct-17 Actual Source: Kilde: Thomson Thomson Datastream/DnBNOR Datastream/DNB Markets Markets 4 week average Back to index Daily Macro Brief page 13 13

14 Preview. Friday 3 November 13:3 (GMT+1) USA: Non-farm payrolls and unemployment Last month: Hurricane effects Non-farm payrolls fell by 33k in September, much lower than consensus had expected (+9k). The unemployment rate dropped.2pp to 4.2%, lower than expected. Hourly wages rose.5% m/m, overshooting expectations by.3pp. This month: Reversed hurricane effects Non-farm payroll expected up 31k in October (Bloomberg), with high/low at 4k/13k. Our estimate is 32k. The unemployment rate is expected unchanged at 4.2%, while wage growth is expected at.2% m/m. Market impact: Normally strong reaction with deviations from consensus USA: Labour market Sep-7 Sep-9 Sep-11 Sep-13 Sep-15 Sep-17 Non-farm payrolls, m/m, 1 Unemployment (rha) Back to index Daily Macro Brief page 14

15 Preview. Friday 3 November 13:3 (GMT+1) USA: Hurricane effects reversed - strong ISMs ISM, manufacturing: Employment Diffusion index 25 Sep-7 Sep-9 Sep-11 Sep-13 Sep-15 Sep-17 ISM non-manuf.: Employment 3 Sep-5 Sep-7 Sep-9 Sep-11 Sep-13 Sep-15 Sep-17 USA: Initial Jobless Claims Seasonally adjusted Oct-16 Dec-16 Feb-17 Apr-17 Jun-17 Aug-17 Oct Actual Source: Kilde: Thomson Thomson Datastream/DnBNOR Datastream/DNB Markets Markets USA: ADP and BLS -5 Sep-15 Sep-16 Sep-17 ADP Payrolls (BLS) 4 week average Back to index Daily Macro Brief page 15

16 Preview: Wednesday 1 September 15: (GMT+1) USA: ISM, manufacturing Previous month: ISM manufacturing index rose more than expected to 6.8. August: According to Bloomberg, the ISM index is expected to drop to The lowest estimate is 56.5, the highest is 6.7. Our estimate is: 6.. Regional indicators points at a moderate downward correction this month. Even if some series rose in October, their level points at a lower ISM. 15 US: Manuf. production and ISM 65 3 USA: Regional indices Standard deviations from average Oct-7 Oct-12 Oct-17 Manuf. prod. y/y, %. ISM (ra) -3 Oct-12 Oct-13 Oct-14 Oct-15 Oct-16 Oct-17 Richmond New York Philadelphia Back to index Daily Macro Brief page 16

17 Preview: MPC-meeting, Thursday 2 November 13: (I) UK: 25 bps. rate hike expected at this meeting Previous meeting: Strong signals of hike McCafferty and Saunders voted for a hike. Clear signals of rate hike in coming months This time: Rate hike of 25 bps. expected Bank rate expected up from.25% to.5%. QE Gilts expected unchanged at 435 bn GBP. Recent economic developments GDP rose.4% q/q and1.6% y/y in Q3. Consumer confidence (GfK) rose in Sep. Unemployment stable at 4.3% in Aug., wage growth stable at 2.2%. Inflation reached 3.% in September. Reuters survey: According to Bloomberg 49 of 58 analysts expect a hike at this meeting UK: Bank rate, LIBOR and Bank of England's assets -1. Oct-9 Oct-11 Oct-13 Oct-15 Oct-17 Bank rate 3m Assets, bn. GBP (ra) Back to index Daily Macro Brief page 17

18 Preview: MPC-meeting, Thursday 2 November 13: (II) UK: Inflation overshoot continues UK: CIPS Oct-7 Oct-9 Oct-11 Oct-13 Oct-15 Oct-17 Manufacturing Services Construction 11 UK: Trade weighted GBP Oct-87 Oct-97 Oct-7 Oct UK: GfK Consumer Confidence Actual, 35 year average and +/- 1 st. deviation -4 Oct-7 Oct-12 Oct UK: Inflation Per cent y/y Sep-5 Sep-7 Sep-9 Sep-11 Sep-13 Sep-15 Sep-17 CPI Import prices (rha) Source: Thomson Datastream/ DNB Markets Back to index Daily Macro Brief page

19 Sweden: Retail sales rose in September Retail sales rose by.8% m/m in September, while consensus had Sweden: Retail sales 3m/3m annual rate, % expected an increase of.1%. In addition, August was revised up by.2pp to.1% m/m Trend rose to 6.3% (3m/3m a.r.), while the annual growth rate surged from.2% to 2.7% y/y Assessment: Swedish households are still optimistic and the upward trend in retail sales seems strong, despite some volatility. Points towards a strong Q3 figure for private consumption Sep-12 Sep-13 Sep-14 Sep-15 Sep-16 Sep-17 3m/3m, ann. rate, % Index (rha) Sweden: m/m % y/y % % 3m a.r. Average Consumption Jun-17 Jul-17 Aug-17 Sep-17 Jun-17 Jul-17 Aug-17 Sep-17 Aug-17 Sep-17 m/m % y/y % Retail sales New car registrations Back to index Daily Macro Brief page 19

20 OSEBX OMX DAX Stoxx 6 FTSE 25 Dow Jones NASDAQ S&P 5 Nikkei 225 Hang Seng Shanghai USA Germany EURUSD EURGBP France Japan Norway Sweden EURCHF EURSEK USDGBP USDJPY USDSEK USDCNY EURNOK USDNOK SEKNOK CHFNOK JPYNOK Italy Spain Markets: Overview Mixed stock markets Both energy and technology stocks rose on Friday, lifted by higher oil prices and solid company reports. Developments in Asia are mixed this morning with Chinese stocks down ~1%. The Spanish government s decision to deprive Catalan of autonomy this weekend failed to cause large market movements, but the Spanish 1y government bond yield is 4bp higher than Friday morning. Brent crude is up 1.8% since Friday morning, currently trading ~6.38USD/barrel. EURNOK is down.6% to FX, change in percent since 27 October 7:26* Equity indices year sov. bond yield, change in bp since 27 October 7:26* EUR USD NOK** *GMT +1 **Note that higher bars indicate weaker NOK % from previous to last close % since last close *GMT +1 **Norway, Sweden, Italy, Spain: Change in bp from previous to last close Back to index Daily Macro Brief page 2

21 Markets Equities 85 Europe USA Oct-23 16:55 Oct-24 12:2 Oct-24 16:55 Oct-25 12:2 Oct-25 16:55 Oct-26 12:2 Oct-26 16:55 Oct-27 12:2 31 Oct-27 16: Oct-25 13:15 Oct-25 2:15 Oct-26 13:5 Oct-26 2:5 Oct-27 14: Oct-27 21:25 Oslo Stock Exchange *GMT +1 EURO STOXX 5 (rha) S&P 5 *GMT +1 Dow Jones (rha) Oct-24 8:1 Oct-25 4: Oct-25 8: Hang Seng *GMT +1 Oct-26 3:5 Asia Oct-26 7:5 Oct-27 3:4 Oct-27 7:4 Nikkei 225 (rha) Oct-3 3: Oct-3 7: Oct-25 13:15 Oct-25 2:15 *GMT +1 Oct-26 13:5 VIX Oct-26 2:5 Oct-27 14:4 Oct-27 21:25 Back to index Daily Macro Brief page 21

22 Markets FX Oct-24 1:2 Oct-25 1:2 EURUSD and USDJPY Oct-26 1:2 Oct-27 1: Oct-3 7: Oct-24 1:2 Oct-25 1:2 EURCHF and EURGBP Oct-26 1:2 Oct-27 1: Oct-3 7:2 *GMT +1 EURUSD USDJPY (inv,rha) *GMT +1 EURCHF EURGBP (rha) EURNOK and USDNOK EURSEK and SEKNOK Oct-24 1:2 Oct-25 1:2 Oct-26 1:2 Oct-27 1: Oct-3 7: Oct-24 1:2 Oct-25 1:2 Oct-26 1:2 Oct-27 1: Oct-3 7:2 *GMT +1 EURNOK USDNOK (rha) *GMT +1 EURSEK SEKNOK (inv,rha) Back to index Daily Macro Brief page 22

23 Change in bp since 27 October Dec Mar Jun Sep Dec Mar Jun Sep Markets Fixed income Oct-27 1:45 Oct-27 14:15 *GMT +1 1 sovereign bond yields USA Oct-27 17:45 Oct-27 21:3 Germany (rha) Oct-3 2: Oct-3 7: Oct-27 1:45 Oct-27 14:15 *GMT +1 1 sovereign bond yields Italy Oct-27 17:45 Oct-27 21:3 Spain (rha) Oct-3 2: Oct-3 7: FRA: NOK and EUR Change in bp left axis % m Nibor NOK, change in bp NOK 3-Oct EUR, change in bp EUR 3-Oct Jul 28-Aug 28-Sep 28-Oct Back to index Daily Macro Brief page 23

24 Markets Miscellaneous Japan: 1 year sovereign bond yield Jul 28-Aug 28-Sep 28-Oct MOVE 3m indeks Jul 26-Aug 26-Sep 25 Spread over Bunds 1y, basis points Crude oil and gold Nov 29-Feb 31-May 31-Aug 3-Nov 28-Feb 31-May 31-Aug France Italy Spain 55. Oct-24 6:15 Oct-25 6:35 Oct-26 6:45 Oct-27 7:5 Crude, $/barrel Gold, $/ounce (rha) *GMT Oct-3 7:15 Back to index Daily Macro Brief page 24

25 Markets Spot rates and forecasts Spot rates and forecasts FX 7 Last Today % In 1m Jan-18 Apr-18 Oct-18 FX 7 USD NOK USD/JPY AUD USD/CNY CAD EUR/USD CHF EUR/GBP CNY EUR/DKK CZK EUR/SEK GBP EUR/CHF ZAR EUR/NOK HKD USD/NOK KRW JPY/NOK BRL SEK/NOK NZD DKK/NOK RUB GBP/NOK SEK CHF/NOK SGD Back to index Daily Macro Brief page 25

26 Markets Interest rates NOK Prior Last SEK Prior Last USD Prior Last EUR Prior Last 1m m m m m m m m m m m m y m m y y y y y y y y.2.2 7y y y y y y y y Norw ay Prior Last SEK Prior Last US Prior Last Germany Prior Last NST479/d y y y y yld y yld y yld y yld US sprea US sprea y yld US spread Norw ay 3m nibor Interest rates Governm ent bonds Interest rate forecasts 1y USA 3m libor sw ap Sw eden 3m libor 1y sw ap 1y sw ap Germany 3m euribor 1y sw ap Jan Jan Jan Jan Apr Apr Apr Apr Oct Oct Oct Oct Back to index Daily Macro Brief page 26

27 Markets Miscellaneous Miscellaneous NOK sov. Prior Last Change Maturity year rem. NOK-index TWI Prior NST 38/d Last NST 39/d Oil price: (Ldn,cl) 1m NST 4/d SPOT NST473/d Gold price PM NST474/d AM: NST479/d Equities Today 7 % last NST479/d S&P % NST479/d Dow Jones % NOK FRA 3 mnd 6 mnd NOK NIBOR FTSE % Dec m.66 Stoxx % Mar m.83 DAX % Jun m.89 Nikkei % Sep OSEBX % Sources to all tables and graphics: Thomson Reuters, Thomson Datastream and DNB Markets Back to index Daily Macro Brief page 27

28 Calendar Friday - Monday Importance GMT+2 Country Event Period Unit Last Cons. DNB Actual Friday 27 October 1:3 Japan Inflation (CPI) ex Food & Energy Sep y/y % :3 Japan Inflation (CPI) Sep y/y % : Sweden Consumer Confidence Oct : Sweden Business Confidence Manufacturing Oct : Sweden Economic Tendency Indicator Oct :3 Sweden Retail Sales ex fuel Sep m/m %.1r :3 USA GDP (Advance) Q3 q/q ar % : USA UoM Consumer confidence Oct Index Importance GMT+1 Country Event Period Unit Last Cons. DNB Actual Monday 3 October to Friday 3 November USA President Donald Trump to nominate his candidate for new Fed Chair (likely this week) Monday 3 October :5 Japan Retail sales Sep m/m % : Norway Retail sales Sep m/m % : Spain GDP Q3 q/q %.9.8 9: Switzerland KOF indicator Oct Index : EMU Consumer Confidence Oct Index : EMU Economic Sentiment Indicator Oct Index :3 USA Personal spending (nominal) Sep m/m % :3 USA PCE core deflator Sep y/y % :3 USA PCE deflator Sep y/y % : Germany CPI Oct P y/y % Germany Retail sales Sep m/m % Back to index Daily Macro Brief page 28

29 Calendar Tuesday - Wednesday Importance GMT+1 Country Event Period Unit Last Cons. DNB Actual Tuesday 31 October Japan BoJ meeting - 1y yield target %... :3 Japan Unemployment rate Sep % : China Manufacturing PMI Oct Index : China Non-Manufacturing PMI Oct Index :3 France GDP (flash) Q3 q/q %.5.5 8: Norway Credit indicator C2 Sep y/y % : Norway Central Bank FX Purchases Nov bn NOK : EMU GDP (flash) Q3 q/q % : EMU Unemployment rate Sep % : EMU CPI (flash) Oct y/y % : EMU Core CPI (flash) Oct y/y % : USA Conf. Board Consumer Conf. Oct Index Wednesday 1 November 1:3 Japan Nikkei Manufacturing PMI Oct Index :45 China Caixin Manufacturing PMI Oct Index : UK Nationwide house prices Oct m/m %.2.2 8:3 Sweden Swedbank Manufacturing PMI Oct Index : Norway Manufacturing PMI Oct Index :3 UK Markit/CIPS Manufacturing PMI Oct Index :15 USA ADP National Employment Oct :45 USA Markit Manufacturing PMI Oct Index : USA ISM Manufacturing PMI Oct Index : USA Construction spending Sep m/m % : USA Fed meeting - Fed funds mid of range % USA Total Vehicle Sales Oct M Back to index Daily Macro Brief page 29

30 Calendar Thursday Friday Importance GMT+1 Country Event Period Unit Last Cons. DNB Actual Thursday 2 November 9:5 France Markit Manufacturing PMI Oct Index :55 Germany Unemployment Change Oct :55 Germany Unemployment Rate Oct % : Norway Norges Bank to publish Financial Stability 217 report 1: EMU Markit Manufacturing PMI Oct Index :25 Norway Norges Bank's Øystein Olsen to speak in Oslo 13: UK BoE meeting - Official Bank Rate Nov % : UK Bank of England Inflation Report 13:3 USA Initial claims :3 USA Output Per Hour Q3 q/q % :3 USA Unit Labor Costs Q3 q/q %.2.4 USA Fed's Powell to speak Friday 3 November 2:45 China Caixin Services PMI Business Activity Oct Index 5.6 8: Norway Manufacturing orders Q3 q/q % :3 Sweden Swedbank Services PMI Oct Index : Norway Unemployment Rate Oct % :3 UK Markit/CIPS Services PMI Oct Index : Norway Housing prices Oct m/m % :3 Norway Norges Bank's Øystein Olsen to speak in Bergen 13:3 USA Trade balance Sep bn :3 USA Non-Farm Payrolls Oct m/m % :3 USA Unemployment Rate Oct % :3 USA Average Hourly Earnings Oct m/m % : USA ISM Non-Manufacturing PMI Oct m/m % : USA Factory orders Sep m/m % :45 USA Markit Composite PMI Oct 55.7 EMU ECB's Coeure to speak in Washington DC USA Fed's Kashkari to speak Back to index Daily Macro Brief page 3

31 DNB Markets Macro Research Contact details Kjersti Haugland Chief Economist, Euro area / kjersti.haugland@dnb.no Jeanette Strøm Fjære Economist, Norway and Sweden / jeanette.strom.fjare@dnb.no Ole A. Kjennerud Economist, China and Japan / ole.kjennerud@dnb.no Knut A. Magnussen Senior Economist, USA, UK and Brazil / knut.magnussen@dnb.no Magne Østnor FX Strategist / magne.ostnor@dnb.no Marit Øwre-Johnsen FX Analyst / marit.owre-johnsen@dnb.no Kyrre Aamdal Senior Economist, Norway, Sweden, interest rates / kyrre.aamdal@dnb.no Back to index Daily Macro Brief page 31

32 Important/Disclaimer This note (the Note ) must be seen as marketing material and not as an investment recommendation within the meaning of the Norwegian Securities Trading Act of 27 paragraph 3-1 and the Norwegian Securities Trading Regulation 27/6/29 no The Note has been prepared by DNB Markets, a division of DNB Bank ASA, a Norwegian bank organized under the laws of the Kingdom of Norway (the Bank ), for information purposes only. The Note shall not be used for any unlawful or unauthorized purposes. The Bank, its affiliates, and any third-party providers, as well as their directors, officers, shareholders, employees or agents (individually, each a DNB Party ; collectively, DNB Parties ) do not guarantee the accuracy, completeness, timeliness or availability of the Note. DNB Parties are not responsible for any errors or omissions, regardless of the cause, nor for the results obtained from the use of the Note, nor for the security or maintenance of any data input by the user. The Note is provided on an as is basis. DNB PARTIES DISCLAIM ANY AND ALL EXPRESS OR IMPLIED WARRANTIES, INCLUDING, BUT NOT LIMITED TO, ANY WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE, FREEDOM FROM BUGS, SOFTWARE ERRORS OR DEFECTS, THAT THE NOTE S FUNCTIONING WILL BE UNINTERRUPTED OR THAT THE NOTE WILL OPERATE WITH ANY SOFTWARE OR HARDWARE CONFIGURATION. In no event shall DNB Parties be liable to any party for any direct, indirect, incidental, exemplary, compensatory, punitive, special or consequential damages, costs, expenses, legal fees, or losses (including, without limitation, lost income or lost profits and opportunity costs) in connection with any use of the Note, even if advised of the possibility of such damages. Any opinions expressed herein reflect the Bank s judgment at the time the Note was prepared and DNB Parties assume no obligation to update the Note in any form or format. The Note should not be relied on and is not a substitute for the skill, judgment and experience of the user, its management, employees, advisors and/or clients when making investment and other business decisions. No DNB Party is acting as fiduciary or investment advisor in connection with the dissemination of the Note. While the Note is based on information obtained from public sources that the Bank believes to be reliable, no DNB Party has performed an audit of, nor accepts any duty of due diligence or independent verification of, any information it receives. Confidentiality rules and internal rules restrict the exchange of information between different parts of the Bank and this may prevent employees of DNB Markets who are preparing the Note from utilizing or being aware of information available in DNB Markets/the Bank that may be relevant to the recipients of the Note. The Note is not an offer to buy or sell any security or other financial instrument or to participate in any investment strategy. Distribution of material like the Note is in certain jurisdictions restricted by law. Persons in possession of the Note should seek further guidance regarding such restrictions before distributing the Note. The Note is for clients only, and not for publication, and has been prepared for information purposes only by DNB Markets - a division of DNB Bank ASA registered in Norway with registration number NO (the Register of Business Enterprises) under supervision of the Financial Supervisory Authority of Norway (Finanstilsynet), the Monetary Authority of Singapore, and on a limited basis by the Financial Conduct Authority and the Prudential Regulation Authority of the UK, and the Financial Supervisory Authority of Sweden. Details about the extent of our regulation by local authorities outside Norway are available from us on request. Information about DNB Markets can be found at dnb.no. Additional information for clients in Singapore The Note has been distributed by the Singapore Branch of DNB Bank ASA. It is intended for general circulation and does not take into account the specific investment objectives, financial situation or particular needs of any particular person. You should seek advice from a financial adviser regarding the suitability of any product referred to in the Note, taking into account your specific financial objectives, financial situation or particular needs before making a commitment to purchase any such product. You have received a copy of the Note because you have been classified either as an accredited investor, an expert investor or as an institutional investor, as these terms have been defined under Singapore s Financial Advisers Act (Cap. 11) ( FAA ) and/or the Financial Advisers Regulations ( FAR ). The Singapore Branch of DNB Bank ASA is a financial adviser exempt from licensing under the FAA but is otherwise subject to the legal requirements of the FAA and of the FAR. By virtue of your status as an accredited investor or as an expert investor, the Singapore Branch of DNB Bank ASA is, in respect of certain of its dealings with you or services rendered to you, exempt from having to comply with certain regulatory requirements of the FAA and FAR, including without limitation, sections 25, 27 and 36 of the FAA. Section 25 of the FAA requires a financial adviser to disclose material information concerning designated investment products which are recommended by the financial adviser to you as the client. Section 27 of the FAA requires a financial adviser to have a reasonable basis for making investment recommendations to you as the client. Section 36 of the FAA requires a financial adviser to include, within any circular or written communications in which he makes recommendations concerning securities, a statement of the nature of any interest which the financial adviser (and any person connected or associated with the financial adviser) might have in the securities. Please contact the Singapore Branch of DNB Bank ASA at in respect of any matters arising from, or in connection with, the Note. The Note is intended for and is to be circulated only to persons who are classified as an accredited investor, an expert investor or an institutional investor. If you are not an accredited investor, an expert investor or an institutional investor, please contact the Singapore Branch of DNB Bank ASA at We, the DNB group, our associates, officers and/or employees may have interests in any products referred to in the Note by acting in various roles including as distributor, holder of principal positions, adviser or lender. We, the DNB group, our associates, officers and/or employees may receive fees, brokerage or commissions for acting in those capacities. In addition, we, the DNB group, our associates, officers and/or employees may buy or sell products as principal or agent and may effect transactions which are not consistent with the information set out in the Note. Additional Information, including for Recipients in the United States: The Note does not constitute an offer to sell or buy a security and does not include information, opinions, or recommendations with respect to securities of an issuer or an analysis of a security or an issuer. Back to index Daily Macro Brief page 32