Weekly Focus Sweden How strong was the global economy before Trump?

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1 Investment Research General Market Conditions 8 November 206 Weekly Focus Sweden How strong was the global economy before Trump? Market Movers ahead While we await greater clarity about what policies to expect under the incoming Trump administration, next week will bring manufacturing and services PMIs in both the US and the Euro area, which we expect to show that the business cycle was on an upward trend, even before Trump won the election. In the US, we will get data for the preliminary core capital goods orders for October, Markit PMI manufacturing and service indices for November as well as Fed minutes. We expect the manufacturing sector to have continued improving in November, while a constant service index should still point to solid growth in the US service sector. In the Fed minutes, we will look for clues to the Fed s 207 outlook, now that a hike in December is almost priced in. In the Euro area, we will get numbers for consumer confidence, PMI manufacturing and German Ifo business expectations. Consumer confidence may weaken a bit with increased political uncertainty in the US and Europe. We expect the manufacturing sector and Germany business expectations to improve further compared with October. In the UK, we do not have many important data releases next week. Still, we look forward to the release of the second estimate of GDP growth in Q3 on Friday. On Wednesday, Chancellor Hammond makes the autumn statement to Parliament, which could point to weak fiscal developments in the UK limiting fiscal stimulus options. Next week will be busy in Scandinavia, with the most important releases being consumer confidence numbers in Denmark and Sweden and the oil investment survey in Norway. Contents Market movers... 2 Global Macro and Market Themes... 5 Scandi Update... 8 Latest research from Danske Bank Markets... 9 Macroeconomic forecast... 0 Financial forecast... Calendar... 2 Financial views Major indices 8-Nov 3M 2M 0yr EUR swap EUR/USD ICE Brent oil Nov 6M 2-24M S&P % 0-5% Source: Danske Bank Global macro and market themes We see a case for reflation in the US but less so in the euro area We expect US reflation to lead to a further rise in equities, higher bond yields and a stronger USD over the next six months. Follow us on Twitter for the latest on macroeconomic and financial market Solid signs for US growth in Q4 UK government budget deficits for the coming years are set to be revised up Source: Macrobond Financial Source: Macrobond Financial Editor Jakob Ekholdt Christensen Chief Analyst jakc@danskebank.dk Important disclosures and certifications are contained from page 4 of this report.

2 Market movers Global In the US next week, we get the preliminary core capital goods orders for October on Wednesday. The three-month average of core capital goods orders suggests that shipments should soon begin to rise and supports our view that business investment has bottomed out. Shipments rose in September, but we need more than one month of growth to be sure that it is not due to noise. We believe business investment has bottomed out and expect orders and shipments of core capital goods to rise in the coming months. Later on Wednesday, we get the preliminary Markit PMI manufacturing index for November, where it will be interesting to see if the positive signals for the manufacturing sector continue. In October, the index rose to a one-year high, which together with positive signals from the ISM manufacturing index, indicate that the manufacturing sector is recovering. We estimate the Markit PMI index increased to 54.0 in November from 53.4 in October. On Wednesday evening we get the FOMC minutes from the November meeting. As expected, there were no major changes in the FOMC s statement. Most importantly, it said the case for a rate hike has continued to strengthen (previously has strengthened ) but that it had decided, for the time being, to wait for some further evidence of continued progress toward its objectives. It will be interesting to see what evidence the Fed needs. In our view, especially now that the US election is behind us, the higher wage growth and lower unemployment rate in the jobs report for October were sufficient. A December hike is fully priced in the markets. Hence, the focus is now moving towards what to expect in 207 with an economy gaining momentum and the outlook being for major fiscal stimulus from the Trump administration. Any details in the minutes regarding the outlook for 207 will be interesting. Has business investment bottomed yet? Source: U.S. Census Bureau Solid signs on Q4 growth Source: ISM, Markit Economics PMI set to rise again in November The week concludes with the preliminary Markit PMI service index for November on Friday. The index has been right about lower growth in H and has been less volatile than the ISM non-manufacturing index, which has jumped up and down recently. The index increased to 54.8 in October, which together with solid levels for the ISM nonmanufacturing index is a good sign that growth will be solid in H2. We believe the Markit PMI service index will stay around its current level in November suggesting the service sector is growing at a solid pace. In the euro area, the consumer confidence figure for November is released on Tuesday. Consumer confidence improved to -8 in October compared to August, but it is not certain that the positive trend will continue. Consumer confidence has so far been resilient to the UK s vote to leave the EU and the still low oil price and continuing employment growth support consumer confidence. However, downside risk exists due to uncertainty following the election of Donald Trump and its possible consequences for EU scepticism in the euro area. On Wednesday, the PMI figures are released for the euro area, Germany and France. The figures for October were strong and for the manufacturing PMIs a solid orderinventory balance although not as strong as September still signals an increase in the manufacturing PMI. For the service PMIs, the future business expectations index from October suggests an increase in the figure in November. Source: Markit PMI, Danske Bank Markets German GDP growth to pick-up in Q4 Source: Eurostat, Ifo, Danske Bank Markets 2 8 November 206

3 Finally, the German Ifo business expectations are released on Thursday. October saw another significant increase in business expectations, which jumped to 06. from 04.5 in September. In line with the manufacturing PMI, ifo expectations could increase again in November. Both of the German economic surveys indicate that the lower than expected German GDP growth in Q3 is likely to pick up in Q4. In the UK, we do not have many important data releases next week. Still, we look forward to the release of the second estimate of GDP growth in Q3 on Friday. While we do not expect any revision to the first growth estimate of 0.5%, we will focus on the GDP subcomponents. Most interesting is how investment performed in the first quarter after the EU vote. We think private consumption growth continued broadly speaking at the same pace as before the EU vote. On Wednesday, Chancellor Hammond makes the autumn statement to Parliament. According to the Financial Times, the statement will show that tax revenues will be hit by slower growth in the coming years. Accumulated, the fiscal deficit is expected to be GBP00bn higher over the forecast horizon compared to the March budget. This also means that there is limited scope for a fiscal stimulus package. As the economy has been quite resilient to the Brexit uncertainties so far and the Bank of England reacted quickly by easing monetary policy, the government can (at least for now) afford to stay patient. There are no market movers in China next week. UK government budget deficits in the coming years are set to be higher in next week s autumn statement Source: ONS, OBR 3 8 November 206

4 Scandinavia In Denmark, the statistical office will release its monthly employment figures for September on Monday. The number of people in work increased by almost 6,000 in August, the biggest monthly rise since January 204, so it seems that the market is still pushing on. Tuesday brings retail sales for October and consumer confidence for November. The latest Dankort debit card data revealed healthy growth in October, which bodes well for retail sales. October saw consumer confidence drop to its lowest since May 203, so it will be interesting to see whether the election of Donald Trump has made people even more pessimistic about the future. Labour market marches on In Sweden, the week ahead contains the NIER s business and consumer confidence (Thu., at CET) surveys and we also receive producer price data (Thu., at CET) and statistics on household debt growth (Fri., at CET). Neither outcome should be able to move financial markets from a longer-term perspective, but will nonetheless provide some insight into near term price pressures, profit development and general sentiment. In Norway, recent years have seen intense interest in the oil investment survey, which is only to be expected given the uncertainty about how far investment would fall after oil prices collapsed. However, oil prices have stabilised, and are now at exactly the same levels as when the last survey was conducted. At the same time, few projects in the Norwegian sector have breakeven prices in the USD40-60/bbl range, which means that price movements in this interval do not mean much for investment levels. As the investment survey is in nominal kroner, there is also a risk that cost-cutting will result in lower expected investment even with unchanged volumes. We very tentatively predict that the oil companies will raise their estimates for 207 marginally, but not enough to affect expectations for activity in the Norwegian sector next year. The week also brings LFS unemployment for September. The divergence between the LFS and NAV jobless measures has increased uncertainty about capacity utilisation in the Norwegian economy. Other indicators seem to support the NAV numbers, however, so the LFS has been attracting slightly less attention. We expect an unchanged unemployment rate of 4.9% and a further increase in employment as indicated by Norges Bank s regional network. Source: Statistics Denmark Inflation expectations continue to rise? Source: NIER. Danske Bank calculations Employment expected to rise Source: Macrobond Financial, Danske Bank Markets Market movers ahead Global movers Event Period Danske Consensus Previous Mon 2-Nov 7:00 EUR ECB's Draghi speaks in Strasbourg Wed 23-Nov 0:00 EUR PMI services, preliminary Index Nov :30 GBP Chancellor Hammond makes autumn statement 4:30 USD Core capital goods orders, preliminary % Oct 0.3% -.3% 5:45 USD Markit PMI manufacturing, preliminary Index Nov :00 USD FOMC minutes Thurs 24-Nov 0:00 DEM IFO - expectations Index Nov Fri 25-Nov 5:45 USD Markit PMI service, preliminary Index Nov Scandi movers Wed 23-Nov 8:00 NOK Unemployment (LFS) % Sep 4.9% 4.9% 4.9% 8:00 NOK Oil investment survey Thurs 24-Nov 9:00 SEK Consumer confidence Index Nov Source: Bloomberg, Danske Bank Markets 4 8 November 206

5 Global Macro and Market Themes The case for reflation what it means and what to watch Following the election of Donald Trump as US president, the reflation theme has gained extra fuel. Industrial commodity prices soared adding to the gains already seen this year. In addition, US market inflation expectations got a big lift. We and others have cried wolf over the past couple of years in terms of rising inflation but it did not happen. However, one day it will, and the question is whether that time is now. Based on commodity prices it is almost certain that so-called base effects will push up inflation over the next six months. However, this will only be temporary unless commodity prices continue to trend higher in coming years. Real reflation is a sustained rise in inflation in which the economy is running hot, pushing wage inflation higher as well. Below, we have made a small checklist of factors in order to judge whether the rise in inflation is the real thing or just a temporary lift. Here, we focus mainly on the US and the euro area. Based on the checklist, we see a good case for reflation in the US whereas it will take more time for the euro area to join. The euro area has more slack left, still many growth headwinds and no signs of wage inflation picking up. In contrast, the US has more or less closed the output gap and it is likely that the economy will run hot over the next year not least when the expected fiscal stimulus from Trump sets in at a time when we expect unemployment to be below NAIRU (long-term equilibrium level) and wage pressures have increased. The investment conclusion of reflation in the US is higher bond yields, a stronger USD, higher stock prices and rising inflation expectations. We look for US 0-year yields to hit 3% (currently 2.3%) in 2M. See Yield Forecast Update, 8 November 206. We expect a stronger USD in six months but weakening from six to 2 months, as the main impact of US reflation is likely to be felt over the next six months. See FX Forecast Update: Trump rally set to extend near term, then reverse, 6 November 206. Key points We see a case for reflation in the US but less so in the euro area. We expect US reflation to lead to a further rise in equities, higher bond yields and a stronger USD over the next six months. Signs of US wage pressure building in contrast with the euro area Source: Bloomberg, Danske Bank Markets US core inflation not far from target still a long way in euro area Source: Macrobond Financial 5 8 November 206

6 While we do not see a strong reflation case in the euro area, German bond yields will see a spillover from higher US yields and we look for 0-year bund yields to hit % in 2 months time from the current level of 0.29%. Rising focus on ECB tapering of purchases in 207 will also put upward pressure on bond yields. The case for reflation a four-point checklist and what to watch. Economic recovery. In order for the economy to run hot and push inflation up, growth needs to move above trend to reduce excess capacity. This can be checked off for most regions currently. Our MacroScope models for October showed a synchronised positive signal pointing to higher growth in both the US, the euro area, Japan and EM. For the US, the boost to growth in 208 from stimuli put in place by Trump should keep the recovery on a sustained path. One thing that could stop that from happening would be overheating and thus too much reflation which would force the Fed to hit the brakes. However, this is not our baseline scenario. 2. Closed output gap. As long as there is plenty of slack in the economy, it is hard to get real price pressure and hit a permanent inflation level of 2% (target in most countries). In the case of the US, we believe we are pretty much there or will be very soon. Slack has been diminishing for a long time and unemployment is now around the NAIRU level. Wage increases have also started to increase and at 2.8% in October it hit the highest level in seven years. When adjusting for productivity growth, which is low these years, the actual rise in labour cost per unit is already at a high level, pointing to rising cost pressures. For the euro area, however, unemployment is still around 0% and plenty of slack is likely to be left. Wage growth is also very subdued, still around % y/y, providing little cost pressures for companies. The IMF and OECD estimate the output gap to be around -.5%. 3. Rising commodity prices. Commodity prices reflect broadly the global output gap. Over the past couple of years, commodity prices fell sharply as the output gap increased in China (high overcapacity in many industries). The decline served as a drag on inflation in other parts of the world, which was reflected in falling import prices. However, this year, commodity prices have bottomed as Chinese construction and infrastructure investment saw a renewed boost. We look for Chinese growth in these sectors to taper off again in 207 but it may be compensated for by Trump s plans for rebuilding US highways, bridges, ports etc. For now, this reflation factor can be ticked off on a global scale and it is likely to feed into higher producer prices in most countries. 4. Monetary accommodation. Finally and importantly, reflation will only come if central banks do not spoil the party before it gets going. This means keeping accommodation in place until market inflation expectations are back in line with the inflation targets and inflation at 2% is reached on a sustained basis. Not just for a couple of months. Keeping monetary policy accommodative does not mean the Fed cannot hike. But it means that it will normalise rates slowly enough for the economy to run a bit hot. This is exactly what the Fed has been communicating and what we expect. The best way to follow the market s faith in the Fed is through market inflation expectations. For the ECB, it is less clear how accommodative it will be. The General Council seems very divided. However, ECB president Mario Draghi seems to be in the dovish camp and today said, we do not see a consistent strengthening of underlying price dynamics. We believe he will get his way and extend the purchasing programme by six months at the December meeting. A synchronised recovery signal across regions Source: Danske Bank Markets Output gap pretty much closed in US but not in the euro area Source: Danske Bank Markets, Macrobond Financial Deflationary pull from commodities have turned at least for now Source: Macrobond Financial Rising commodity prices to push up US ISM prices paid Source: Macrobond Financial 6 8 November 206

7 The US can thus tick off pretty much all of the above, which is why we see a good case for reflation to play out. This would, in our view, play out even without Trump s fiscal expansion. However, his policies are likely to add to the reflation case for the US. However, the euro area is further behind in the economic recovery and still has plenty of slack and low wage pressures. Hence, even though we expect a recovery of growth and commodity prices to be less of a drag, a real reflation scenario is not in the cards for now. Could a USD appreciation stop the fun? It is not likely, in our view, as tempering a too strong USD is part of the reason why the Fed will move very gradually and only raise rates twice in 207. If the USD strengthened too much, the Fed would simply hold back on rate hikes to allow the economy to run a bit hot and a possible overshooting of the inflation target. Higher inflation expectations as markets price reflation Source: Bloomberg, Danske Bank Markets For more on our inflation views see Global Inflation: Set to surprise on the upside lifting long-dated inflation pricing, 27 October 206 and Strategy: Higher inflation to push up inflation expectations further, 28 October 206. Global market views Asset class Equities Overweight stocks short and medium term OW US and Japan, UW Europe. Neutral on Nordics and UW EM Main factors Cyclical recovery. Fiscal boost to US will raise earnings relative to Europe. High risk of protectionism and tighter monetary policy hurting EM assets. Bond market Hier yields, further steepening 2Y0Y curve US-euro spread: slightly wider in 207 Peripheral spreads: tightening Credit spreads: neutral M ore expansive fiscal policy in the US adds to steepening trend. Tapering, higher inflation prints and a global recovery also point towards a steeper curve. ECB QE should mitigate some of the effects. The Fed hike is moving closer, adding upside to the long end of the US curve. But ECB tapering and higher higher inflation prints are risks for the European bond markets, which could potentially tighten the US-Euro spread given that European yields are record low. Economic recovery and QE means further tightening. But politics and tapering remain clear risk factors. The ECB is keeping spreads contained. FX EUR/USD - lower going into FOM C meeting in December USD to remain supported by Trump and Fed in the near term. Higher in 207. EUR/GBP - lower short term on re-prising of Brexit risk premium after Trump Expect EUR/GBP to settle in the range near term. Risk skewed to the upside over the mdium term due to Brexit. USD/JPY - neutral with short-term risks skewed to the upside USD/JPY to remian supported near term by relative monetary policy and risk appetite. EUR/SEK - set to stay elevated in coming months before turning in 207 Gradually lower on relative fundamentals and valuation in 207. Near term the SEK will remain weak mainly due to the Riksbank. EUR/NOK - short-term risks skewed to the upside At YE, liquidity set to prove a headwind for NOK. Cross to move lower next year on valuation and real rate differentials normalising. Commodities Oil price gradual rise amid volatility on OPEC doubts Metal prices rallying on outlook for US infrastructure spending Gold price change in risk sentiment negative for gold price Agriculturals strong output has sent prices down again Support from positive sentiment; market doubting OPEC deal and rising USD weighing on oil price. Underlying support from consolidation in mining industry and recovery in global manufacturing. Rising yields and USD pushing gold price down. Attention has turned to La Niña weather risks in H2 6, large stocks limit upside risk to prices. Source: Danske Bank Markets 7 8 November 206

8 Scandi Update Denmark economy stronger than we thought Statistics Denmark published revised national accounts data during the week showing that the Danish economy has performed much better in recent years than previously suggested. While the new figures still do not paint the picture of a booming economy, they do bring a marked upward adjustment to domestic economic activity relative to previous releases. In addition, Statistics Denmark published its new GDP indicator for Q3 showing growth of 0.2% q/q, which is much better than the Q3 numbers for private consumption and foreign trade had suggested. Employer federation DA, meanwhile, released figures showing that wages climbed 2.% y/y in Q3. With consumer prices more or less unchanged over the same period, this translates into real wage growth just shy of 2%, which is very high by both recent and historical standards. Danish economy better than advertised Source: Statistics Denmark Sweden decelerating fast With a few of the last pieces of the puzzle provided during the past week, we can now make a full first estimate of Q3 GDP. (Alas, considerably less than half of the necessary primary data to compute GDP is publically available.) Our preferred indicator, Danske Activity Index replicating Statistics Sweden s old GDP indicator suggests that Q3 GDP growth was around 2.7% y/y, which is bang in line with our ex ante estimate. This is a notch below the Riksbank s most recent (and downward revised) forecast and constitutes a quarterly growth (vol., s.a., and w.d.a.) of 0.2% q/q. Still positive, but far below the growth rates seen in quarters. Over the past week, we also received October inflation. This was again below the Riksbank s forecasts and did not at all constitute a recoil from September as the Riksbank expected. Indeed, we now have core inflation more than half a percentage point below the Riksbank s September forecast; without any new monetary policy stimuli. In our view, this strengthens our call for both a repo rate cut of 0bp and an extension of the QE programme amounting to SEK30bn (representing continued tapering ). Pronounced deceleration in Swedish GDP-growth Source: Statistics Sweden. Danske Bank calculations. Norway moderate growth Mainland GDP grew 0.2% q/q in Q3, which was slightly less than anticipated. As expected, growth was driven mainly by government demand and housing investment, while net exports were disappointingly weak. The underlying data were encouraging nonetheless, as domestic demand (adjusted for stocks and fighter aircraft) was up 0.4% q/q. Particularly pleasing was that business investment grew for a fourth successive quarter, boosting the chances of a more self-sustaining upturn in 207. The drop in oil investment was also the smallest for three years, making us all the more convinced that it is close to bottoming out. Although growth was slightly weaker than Norges Bank had projected, we do not think this enough for the bank to be tempted to cut interest rates further. Growth picking up Source: Macrobond Financial 8 8 November 206

9 Latest research from Danske Bank Markets 8/ Yield Forecast Update - From reflation to Trumpflation Monthly yield forecast update 6/ FX Forecast Update: Trump rally set to extend near term, then reverse EUR/USD. We lower our EUR/USD forecasts to.05 in M (.09 previously),.04 in 3M (.08),.08 in 6M (.) and.2 in 2M (.5). / Research: China letter 4 - challenges with overcapacity and SOE reforms This is the fourth document based on a trip to China this autumn. We look at China s challenges relating to overcapacity and the lack of reform of inefficient state-owned enterprises (SOEs). 9 8 November 206

10 Macroeconomic forecast Macro forecast, Scandinavia Year GDP cons. Private cons. Fixed inv. Stock build. 2 Exports Imports Inflation Unemploym. 3 budget 4 debt 4 Current acc. 4 Denmark Sweden Norway Macro forecast, Euroland Year GDP cons. Private cons. Fixed inv. Stock build. 2 Exports Imports Inflation Unemploym. 3 budget 4 debt 4 Current acc. 4 Euroland Germany France Italy Spain Finland Macro forecast, Global Year GDP Private cons. cons. Fixed inv. Stock build. 2 Exports Imports Inflation Unemploym. 3 budget 4 debt 4 Current acc. 4 USA China UK Source: OECD and Danske Bank. ) % y/y. 2) % contribution to GDP growth. 3) % of labour force. 4) % of GDP. 0 8 November 206

11 Sweden Financial forecast Bond and money markets Source: Danske Bank Markets Currency vs USD Currency vssek USD 8-Nov m m m EUR 8-Nov m m m JPY 8-Nov m m m GBP 8-Nov m m m CHF 8-Nov m m m DKK 8-Nov m m m SEK 8-Nov m m m NOK 8-Nov m m m Equity markets Regional Risiko profil 3 mdr. Pris trend 3 mdr. Pris trend 2 mdr. Regionale rekommendationer USA (USD) Growth boost: fisc. expansion, tax cuts, infl./growth-impulse Medium 5-0% 0-5% Overweight Emerging markets (local ccy) Hurt by stronger USD and increased protectionism Medium -5-0% -5-+5% Underweight Japan (JPY) Valuation and currency support Medium 5-0% 0-5% Overweight Euro area (EUR) Weaker growth and EPS momentum than USA Medium 0-5% 0-5% Underweight UK (GBP) Currency support, stronger infl. exp. off-set Brexit negativity Medium 3-8% 5-0% Neutral Nordics (local ccy) Currency support on earnings, continued domestis demand Medium 3-8% 5-0% Neutral Commodities Key int. rate 3m interest rate 2-yr swap yield 0-yr swap yield Currency vs EUR Average 8-Nov Q Q2 Q3 Q4 Q Q2 Q3 Q NYMEX WTI ICE Brent Copper 5,496 4,672 4,73 4,792 4,900 5,000 5,00 5,200 5,300 4,774 5,50 Zinc 2,533,687,930 2,255 2,50 2,50 2,50 2,00 2,00 2,005 2,25 Nickel,245 8,537 8,885 0,308 0,700 0,900,00,300,500 9,607,200 Aluminium,688,56,584,632,700,750,800,850,900,608,825 Gold,208,83,260,335,325,300,275,250,225,276,263 Matif Mill Wheat Rapeseed CBOT Wheat CBOT Corn CBOT Soybeans ,059,03,050,00,075,050,025,00,063 8 November 206

12 Calendar Key Data and Events in Week 47 During the week Period Danske Bank Consensus Previous Sat 9 USD Fed's Powell (voter, neutral) speaks Monday, November 2, 206 Period Danske Bank Consensus Previous 0:50 JPY Exports y/y (%) Oct :50 JPY Import y/y (%) Oct :50 JPY Trade balance, s.a. JPY bn Oct :00 DKK Employment (monthly).000 m/m Sep :00 SEK Riksbank's Jochnick speaks about financial regulation 4:00 USD Fed's S.Fischer (voter, neutral) speaks 7:00 EUR ECB's Draghi speaks in Strasbourg Tuesday, November 22, 206 Period Danske Bank Consensus Previous 6:30 NOK Consumer confidence Net. bal. 4th quarter :00 DKK Consumer confidence Net. bal. Nov.2 9:00 DKK Retail sales m/m y/y Oct 0.3%.7% 4:00 HUF Central Bank of Hungary rate decision % 0.90% 0.90% 0.90% 4:30 CAD Retail sales m/m Sep 0.7% -0.% 6:00 USD Existing home sales m (m/m) Oct % 6:00 EUR Consumer confidence, preliminary Net bal. Nov Wednesday, November 23, 206 Period Danske Bank Consensus Previous 8:00 NOK Unemployment (LFS) % Sep 4.9% 4.9% 4.9% 8:00 NOK Oil investment survey 9:00 FRF PMI manufacturing, preliminary Index Nov :00 FRF PMI services, preliminary Index Nov :30 SEK Riksbank releases Stability Report No.2 9:30 DEM PMI manufacturing, preliminary Index Nov :30 DEM PMI services, preliminary Index Nov :00 EUR PMI manufacturing, preliminary Index Nov :00 EUR PMI composite, preliminary Index Nov :00 EUR PMI services, preliminary Index Nov :30 GBP Chancellor Hammond makes autumn statement 4:30 USD Initial jobless claims :30 USD Core capital goods orders, preliminary % Oct 0.3% -.3% 5:00 USD FHFA house price index m/m Sep 0.5% 0.7% 5:45 USD Markit PMI manufacturing, preliminary Index Nov :00 USD University of Michigan Confidence, final Index Nov :00 USD New home sales 000 (m/m) Oct (3.%) 6:30 USD DOE U.S. crude oil inventories K :00 USD FOMC minutes Source: Danske Bank Markets 2 8 November 206

13 Calendar continued Thursday, November 24, 206 Period Danske Bank Consensus Previous :30 JPY Nikkei Manufacturing PMI, preliminary Index Nov 5.4 6:00 JPY Leading economic index, final Index Sep :00 DEM GDP, second estimate q/q y/y 3rd quarter 0.2% 0.2%.7% 0.2%.7% 8:00 DEM Private consumption q/q 3rd quarter 0.3% 0.2% 8:00 DEM Government consumption q/q 3rd quarter 0.6% 0.6% 8:00 DEM Gross fixed investments q/q 3rd quarter 0.3% -.5% 8:45 FRF Business confidence Index Nov :00 SEK Consumer confidence Index Nov :00 SEK Economic Tendency Survey Index Nov 06. 9:00 SEK Manufacturing confidence Index Nov :30 SEK PPI m/m y/y Oct -0.% -0.% 0:00 DEM IFO - business climate Index Nov :00 DEM IFO - current assessment Index Nov :00 DEM IFO - expectations Index Nov :45 SEK Riksbank's Flodén speaks about the negative interest rate 2:00 TRY Central Bank of Turkey rate decision % 7.50% 7.50% 7.50% 3:00 DEM GfK consumer confidence Net. Bal. Dec Friday, November 25, 206 Period Danske Bank Consensus Previous 0:30 JPY CPI - national y/y Oct 0.0% -0.5% 0:30 JPY CPI - national ex. fresh food y/y Oct -0.4% -0.5% 0:30 JPY CPI - national ex. fresh food and energy y/y Oct 0.% 0.0% 8:45 FRF Consumer confidence Index Nov :30 SEK Household lending y/y Oct 7.4% 7.4% 7.5% 0:30 GBP GDP, second estimate q/q y/y 3rd quarter 0.5% 2.3% 0.5% 2.3% 0:30 GBP Index of services m/m 3m/3m Sep 0.2% 0.8% 0.2% 0.8% 4:30 USD Advance goods trade balance USD bn Oct :45 USD Markit PMI service, preliminary Index Nov The editors do not guarantee the accurateness of figures, hours or dates stated above For furher information, call (+45 ) Source: Danske Bank Markets 3 8 November 206

14 Disclosures This research report has been prepared by Danske Bank Markets, a division of Danske Bank A/S ( Danske Bank ). The author of the research report Jakob Ekholdt Christensen, Chief Analyst. Analyst certification Each research analyst responsible for the content of this research report certifies that the views expressed in the research report accurately reflect the research analyst s personal view about the financial instruments and issuers covered by the research report. Each responsible research analyst further certifies that no part of the compensation of the research analyst was, is or will be, directly or indirectly, related to the specific recommendations expressed in the research report. Regulation Danske Bank is authorised and subject to regulation by the Danish Financial Supervisory Authority and is subject to the rules and regulation of the relevant regulators in all other jurisdictions where it conducts business. Danske Bank is subject to limited regulation by the Financial Conduct Authority and the Prudential Regulation Authority (UK). Details on the extent of the regulation by the Financial Conduct Authority and the Prudential Regulation Authority are available from Danske Bank on request. The research reports of Danske Bank are prepared in accordance with the recommendations of the Danish Securities Dealers Association. Conflicts of interest Danske Bank has established procedures to prevent conflicts of interest and to ensure the provision of high-quality research based on research objectivity and independence. These procedures are documented in Danske Bank s research policies. Employees within Danske Bank s Research Departments have been instructed that any request that might impair the objectivity and independence of research shall be referred to Research Management and the Compliance Department. Danske Bank s Research Departments are organised independently from and do not report to other business areas within Danske Bank. Research analysts are remunerated in part based on the overall profitability of Danske Bank, which includes investment banking revenues, but do not receive bonuses or other remuneration linked to specific corporate finance or debt capital transactions. Financial models and/or methodology used in this research report Calculations and presentations in this research report are based on standard econometric tools and methodology as well as publicly available statistics for each individual security, issuer and/or country. Documentation can be obtained from the authors on request. Risk warning Major risks connected with recommendations or opinions in this research report, including a sensitivity analysis of relevant assumptions, are stated throughout the text. Expected updates None. Date of first publication See the front page of this research report for the date of first publication. General disclaimer This research has been prepared by Danske Bank Markets (a division of Danske Bank A/S). It is provided for informational purposes only. It does not constitute or form part of, and shall under no circumstances be considered as, an offer to sell or a solicitation of an offer to purchase or sell any relevant financial instruments (i.e. financial instruments mentioned herein or other financial instruments of any issuer mentioned herein and/or options, warrants, rights or other interests with respect to any such financial instruments) ( Relevant Financial Instruments ). The research report has been prepared independently and solely on the basis of publicly available information that Danske Bank considers to be reliable. While reasonable care has been taken to ensure that its contents are not untrue or misleading, no representation is made as to its accuracy or completeness and Danske Bank, its affiliates and subsidiaries accept no liability whatsoever for any direct or consequential loss, including without limitation any loss of profits, arising from reliance on this research report. The opinions expressed herein are the opinions of the research analysts responsible for the research report and reflect their judgement as of the date hereof. These opinions are subject to change, and Danske Bank does not undertake to notify any recipient of this research report of any such change nor of any other changes related to the information provided in this research report. This research report is not intended for, and may not be redistributed to, retail customers in the United Kingdom or the United States. This research report is protected by copyright and is intended solely for the designated addressee. It may not be reproduced or distributed, in whole or in part, by any recipient for any purpose without Danske Bank s prior written consent. 4 8 November 206

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