Yield Outlook Bond sell-off set to pause before resuming in the autumn

Investment Research General Market Conditions 17 March 2017 Yield Outlook Bond sell-off set to pause before resuming in the autumn While we continue to see further upside for both 10Y Bund and 10Y US Treasury yields on a 6M-12M horizon, we expect no major yield changes over the next three months. Quick links We expect the market to start pricing an ECB tapering premium in H2 17 and the discussion of the possibility of an early 2018 rate hike might also add to the upside potential for yields on a 6M to 12M horizon. We continue to expect a steeper 2Y-10Y EUR yield curve at end-2017. While the ECB still has a tight grip on the short end of the curve, this is not the case for the 10Y segment. We expect 10Y Bund yields to rise to 0.90% and 10Y US Treasury yields to 3.0% by end-2017. In Yield Forecast Update: Higher yields an H2 17 theme, 13 February, we argued that yields would move higher in 2017 but that this would be mainly a H2 17 theme. However, over the past month, we have seen both EUR and USD rates and yields moving higher more or less in tandem. US 10Y rates are now at the highest level seen since the autumn of 2014 and EUR 10Y rates at the highest level since the beginning of 2016. We can point to several factors when explaining why we are seeing renewed pressure on global fixed income. First, we have seen a step-up in the rhetoric at the FOMC, which a few weeks ago suddenly changed its mind and started clearly signalling an earlier rate hike than previously expected. It resulted in a significant repricing of the US money-market curve. Hence, ahead of the March meeting the rate hike was almost fully priced and the market is now close to pricing in two more rate hikes this year and 2.5 more rate hikes of 25bp next year. Eurozone forecasts US forecasts UK forecasts Denmark forecasts Sweden forecasts Norway forecasts Forecasts table Policy rate outlook Country Spot +3m +6m +12m USD 1.00 1.00 1.25 1.75 EUR 0.00 0.00 0.00 0.00 GBP 0.25 0.25 0.25 0.25 DKK 0.05 0.05 0.05 0.05 SEK -0.50-0.50-0.50-0.50 NOK 0.50 0.50 0.50 0.50 10-year swap rate outlook The global fixed income sell-off that started in August 2016 has continued this year (%) The Federal Reserve has prepared the market for further rate hikes Country Spot +3m +6m +12m USD 2.50 2.45 2.65 3.00 EUR 0.87 0.85 1.00 1.30 GBP 1.29 1.25 1.55 1.85 DKK 1.11 1.10 1.25 1.55 SEK 1.28 1.35 1.45 1.60 NOK 2.06 2.10 2.30 2.60 Source: Macrobond Financial Source: Macrobond Financial The repricing of the US money-market curve has weighed on the whole curve in the US and is an important driver behind the higher US rates. Chief Analyst Arne Lohmann Rasmussen +45 45 12 85 32 arr@danskebank.dk Assistant Analyst Nina T. B. Andersen +45 45 12 82 87 nian@danskebank.dk Important disclosures and certifications are contained from page 13 of this report. www.danskeresearch.com

Second, the ECB has also moved in a slightly less dovish direction. At the March meeting, the ECB President acknowledged that the risk of, for example, deflation is now much lower. Hence, the genie is out of the bottle and a lively market discussion has started. One idea is that the ECB could remove the current negative deposit rate before the QE programme has been completed. This strategy would take away the burden on, in particular, banks in southern Europe from negative deposit rates, so they can more easily boost lending. Simultaneously, continued QE purchases should prevent periphery bond yields from spiking, which is the fear if purchases are cut-off too abruptly. The market is now pricing the first ECB rate hike of 10bp in a years time and deposit rates are expected to turn positive in 2019. Finally, and perhaps the most important factor behind the move higher in rates, has been the continued improvement in the global outlook. PMIs continue to run at a high level and job growth remains strong in the US. Add to this inflation at 2.2% in Germany and 2.0% in the eurozone. PMIs indicate that the global recovery remains on track Euro inflation at the 2%-target for the first time in many years Source: Macrobond Financial Source: Macrobond Financial But time for a global pause in the move higher in rates and yields As discussed above, central banks have been an important driver for the recent move higher in rates and yields. We argue that this factor will abate for the next couple of months. The market is now more or less priced according to the Fed s rate path and the market has now pencilled in the first rate hike from the ECB in early spring 2018. Hence, if anything, the risk is skewed on the downside for rates over the next couple of months if the markets begin to have doubts about future rate hikes from both the ECB and the Fed. Eurozone inflation will drop later in 2017 as energy drops out Furthermore, we would like to highlight the risk of a setback in risk appetite. As we highlighted in Yield Forecast Update: Higher yields an H2 17 theme, 13 February, the market is already positioned for higher bond yields, especially in the US, and expectations for economic data are high. The so-called surprise indices are at an elevated level, indicating that the margin for disappointments is high if economic numbers come out weaker than expected. One could also point to the strong optimism in global equity markets. If sentiment turns around, it could lend support to global bond markets. The same goes for the French Presidential election. If the polls start to move in favour of Marine Le Pen, it could also lend support to global fixed income. There is also a growing risk that the global manufacturing cycle, which has been going up for many months, has peaked. We often see downward pressure on yields if global PMIs start to edge lower. We could also add that inflation in the eurozone has probably peaked here in Q1, as the impact of higher energy prices now starts to fall out. Source: Macrobond Financial, Danske Bank Markets 2 17 March 2017 www.danskeresearch.com

One should also not underestimate the effect of the ECB continuing its QE programme, buying government bonds worth EUR60bn a month in April and for the rest of 2017 at least. The ECB now also buys bonds with yields below its key policy rate of -0.40%. Finally, the need for collateral for repo transactions is currently prompting exceptionally high demand for German Bunds, pushing German yields further down. All in all we forecast that the both 5Y and 10Y yields will stay close to the current level or could even fall slightly in both the eurozone and the US over the next three months. Market is still positioned for higher yields Global PMIs are at a high level, risk of correction Source: Macrobond Financial Source: Macrobond Financial Though hard to avoid higher yields later in the year Even though we are not calling for any significant further rise in yields over the next three months, we think the outlook is somewhat different if we look six to 12 months ahead. It is widely expected that the Fed will still hiking rates in autumn. On top of this, a discussion regarding the Fed balance sheet may also start to dominate the agenda. Basically, the Fed has said that as a part of the normalisation of monetary policy the current balance sheet, which reflects previous QE programmes, will have to be wound down. A first step would be to stop reinvestments, which could be seen as negative for the bond market. However, market attention is also likely to be on the ECB. The market focus will be on whether the ECB will taper (scale down) its bond purchases or cease its purchases altogether. Remember, US Treasury yields rose significantly in 2013 when the Fed announced the tapering of its QE programme. The discussion of the timing of a possible first rate hike is also likely to be lively. Will the ECB hike before QE purchases have ended? We have so far argued that any normalisation of ECB monetary policy will be in this order: first QE purchases are scaled back, then ceased and then we can start to discuss rate hikes. This has also been the message from the ECB. However, a market discussion is currently wondering if this order could be reversed, i.e. the ECB may take away negative policy rates before the QE programme has finished. The argument is that the negative rates are weighing on banks earnings and hampering lending. In contrast, an extension of QE purchases would ensure that yields in periphery bond markets such as Italy do not spike if the biggest buyer, the ECB, leaves the market. We expect the market to start focusing on the prospects for tapering in 2017 and looking ahead to the turn of the year, which should by itself serve to push up long-term German yields. However, we underline that we are still convinced the ECB will go through with its current QE programme and believe rate hikes are not likely on a 12M horizon. 3 17 March 2017 www.danskeresearch.com

Yield and rates expected higher on a 12M horizon The pricing or fear of ECB tapering and higher US yields are two of the reasons we continue to see a steeper 2Y-10Y EUR yield curve in 2017. The ECB still has a tight grip on the short-end of the curve but this is not the case for the 10Y segment. We expect higher 10Y EUR yields to materialise primarily on a 12M horizon and we continue to target EUR swap rates at 1.30% and 10Y German yields at 0.90% on a 12M horizon. We also still expect US yield movements to feed through into euro yields. We expect the Fed to hike two times more this year (July and December). We forecast three hikes in 2018. All in all, our end- 2017 10Y US Treasury yield target is 3.0% but with a certain amount of upside risk. 4 17 March 2017 www.danskeresearch.com

Contents and contributors Eurozone...6 Macro Senior Analyst Pernille B. Henneberg +45 45 13 20 21 perni@danskebank.dk Interest rates Chief Analyst Arne Lohmann Rasmussen +45 45 12 85 32 arr@danskebank.dk US...7 Macro & interest rates Senior Analyst Mikael Olai Milhøj +45 45 12 76 07 milh@danskebank.dk Interest rates Chief Analyst Arne Lohmann Rasmussen +45 45 12 85 32 arr@danskebank.dk UK...8 Macro & interest rates Senior Analyst Morten Helt +45 45 12 85 18 mohel@danskebank.dk Denmark...9 Macro Chief Economist Las Olsen +45 45 12 85 36 laso@danskebank.dk Interest rates Chief Analyst Arne Lohmann Rasmussen +45 45 12 85 32 arr@danskebank.dk Sweden... 10 Macro & interest rates Chief Analyst Michael Boström +46 8 568 80587 mbos@danskebank.com Senior Analyst Michael Grahn +46 8 568 80700 mika@danskebank.com Senior Analyst Marcus Söderberg +46 8 568 80564 marsd@danskebank.com Senior Analyst Carl Milton +46 8 568 80598 carmi@danskebank.com Norway... 11 Macro & interest rates Chief Analyst Jostein Tvedt +47 23 13 91 84 jtv@danskebank.dk Forecasts table... 12 5 17 March 2017 www.danskeresearch.com

Eurozone forecasts The ECB did not provide much new information at its March meeting and it still plans to continue QE purchases for the rest of 2017. However, given the latest upside surprise in inflation to 2.0% and the recovery in the European manufacturing cycle, we expect tapering to become a market theme in 2017, although mainly in the second part of 2017. Note though, that President Mario Draghi has maintained a dovish tone and reiterated that underlying inflation pressures remain very subdued. The timing of the first rate hike and the whether the deposit rate can be hiked before the QE programme remains a theme that can weigh on the European fixed income market We continue to expect a steeper EUR yield curve 2Y10Y in 2017. The ECB still has a tight grip on the short-end of the curve, especially as the ECB is now buying below the depo rate at -0.4%. However, this is not the case for the 10Y segment of the curve, which we expect to be pushed up by higher US yields and a market slowly pricing in a greater probability of the ECB tapering QE purchases in 2018. EUR forecasts summary 16/03/2017 --- Forecast --- --- Fcst vs Fwd in bp --- EUR Spot +3m +6m +12m +3m +6m +12m Money market Refi 0.00 0.00 0.00 0.00 - - - 3M -0.33-0.35-0.35-0.35-4 -9-17 Government bonds 2-year -0.80-0.80-0.70-0.60 - - - 5-year -0.33-0.45-0.40-0.20 - - - 10-year 0.45 0.45 0.60 0.90 - - - Swap rates 2-year -0.10-0.10-0.10 0.00-5 -10-11 5-year 0.26 0.15 0.20 0.40-18 -19-11 10-year 0.87 0.85 1.00 1.30-7 +2 +21 EUR swap curve One month change 2.0 % bp 12 1.5 10 8 1.0 6 0.5 4 2 0.0 0 0 3 6 9 12 15 18 21 24 27-0.5-2 Change,bp (rhs) 16-Feb-17 16-Mar-17 3M Euribor 10Y EUR swap rates 6 17 March 2017 www.danskeresearch.com

US forecasts Following the March hike of the Fed Funds rate to 1%, we expect the Fed to hike twice more this year (July and December) and three to four times next year. We expect the Fed to begin the reduction of its balance sheet in Q1 18. It is still waiting for more information about Trumponomics and the previous FOMC meetings have revealed that almost all FOMC members think there is upside risk to growth due to the expectations of more expansionary fiscal policy. US yields increased significantly in Q4 16, supported by better economic data and expectations of more expansionary fiscal policy. However, we do not expect this trend to continue in Q2. The market seems to have priced in the global reflation theme and the market has become a bit impatient waiting to see how Trump will conduct fiscal policy during his term. Furthermore, the market is now pricing more or less according to our forecasts in respect of Fed hikes. Hence, it seems that yields have reached a plateau, which we expect them to stay close to over the next 3M, before moving higher again in 6M-12M. We still expect 10Y US treasury yields to reach 3.0% in 12M. USD forecasts summary 16/03/2017 --- Forecast --- --- Fcst vs Fwd in bp --- USD Spot +3m +6m +12m +3m +6m +12m Money market Fed Funds 1.00 1.00 1.25 1.75 - - - 3M 1.14 1.47 1.58 1.95 +12 +10 +20 Government bonds 2-year 1.33 1.40 1.50 2.00 - - - 5-year 2.03 2.00 2.20 2.40 - - - 10-year 2.53 2.50 2.70 3.00 - - - Swap rates 2-year 1.67 1.70 1.75 2.25-10 -16 +13 5-year 2.15 2.10 2.30 2.50-13 +0 +8 10-year 2.50 2.45 2.65 3.00-10 +5 +32 USD swap curve one month change 3.0 % bp 0 2.5-1 -2 2.0-3 1.5-4 1.0-5 -6 0.5-7 0.0-8 0 3 6 9 12 15 18 21 24 27 Change,bp (rhs) 16-Feb-17 16-Mar-17 3M USD Libor rates 10Y USD swap rates 7 17 March 2017 www.danskeresearch.com

UK forecasts The Bank of England maintained its neutral stance at the March monetary policy meeting and we still expect it to remain on hold for the next 12 months as (1) we think it is unlikely the BoE will tighten monetary policy in a time of elevated political uncertainty and (2) we think the BoE will continue to prioritise growth over high inflation. On the other hand, we also think we need to see substantially slower growth and/or higher unemployment before easing becomes likely again. Markets have priced in an accumulated 8bp rate hike this year, while pricing point to 25bp rate increase by end-2018. As such, we think the market pricing is too hawkish and we see little prospect of higher UK money-market rates in the coming 12 months. We expect UK gilt yields to stay at current levels for now, before eventually moving higher in 6-12M, driven by higher yields in the US and Europe. We expect the 2Y10Y and 5Y10Y yield curves to steepen, as we expect the short end of the curve to stay low. UK forecasts summary 16/03/2017 --- Forecast --- --- Fcst vs Fwd in bp --- GBP Spot +3m +6m +12m +3m +6m +12m Money market Repo 0.25 0.25 0.25 0.25 - - - 3M 0.34 0.35 0.35 0.36-3 -8-16 Government bonds 2-year 0.10 0.15 0.15 0.20 +6 +1-6 5-year 0.62 0.60 0.65 0.90-3 -4 +8 10-year 1.27 1.25 1.50 1.80-7 +12 +30 Swap rates 2-year 0.63 0.60 0.60 0.60-8 -13-22 5-year 0.91 0.90 1.00 1.15-6 -1 +6 10-year 1.29 1.25 1.55 1.85-8 +19 +42 UK swap curve one month change 2.0 % bp 2 1.5 0-2 1.0-4 0.5-6 0.0-8 0 3 6 9 12 15 18 21 24 27 Change,bp (rhs) 16-Feb-17 16-Mar-17 3M GBP Libor rates 10Y UK swap rates 8 17 March 2017 www.danskeresearch.com

Denmark forecasts EUR/DKK reached a new low under Governor Lars Rohde in February at around 7.4330. This led Danmarks Nationalbank (DN) to sell DKK5bn in FX intervention. We expect it to keep the rate of interest on certificates of deposit (CD rate) unchanged at -0.65% in 12M. In May and June 2016, DN sold DKK50bn in FX intervention to fend off downward pressure on the DKK ahead of the UK referendum on EU membership, while it refrained from lowering its policy rates. In our view, this was a clear signal that FX intervention selling of DKK is the preferred instrument for DN to cap the EUR/DKK lower bound. Should the ECB lift its deposit rate later this year (not our main scenario), we would expect DN to increase the CD rate accordingly. Given that we expect the ECB to continue with its QE programme throughout 2017 and into 2018, we expect the pressure for the Danish central bank to intervene in the market to intensify in 2018. If political uncertainty escalates in the eurozone, e.g. if Marine le Pen wins the French Presidential election and then calls a French referendum on the euro, we believe it is very likely that we could see a strong inflow into DKK and Danish fixed income assets, leading to a significant tightening of the yield and rates spread to Germany and the EUR swap curve. DKK forecasts summary 16/03/2017 --- Forecast --- --- Fcst vs Fwd in bp --- DKK Spot +3m +6m +12m +3m +6m +12m Money market CD -0.65-0.65-0.65-0.65 - - - Repo 0.05 0.05 0.05 0.05 - - - 3M -0.25-0.25-0.25-0.25-2 -8-18 6M -0.10-0.10-0.10-0.10-7 -11-18 Government bonds 2-year -0.53-0.55-0.45-0.35 - - - 5-year -0.16-0.25-0.20 0.00 - - - 10-year 0.73 0.70 0.85 1.15 - - - Swap rates 2-year 0.06 0.05 0.05 0.15-6 -12-14 5-year 0.46 0.35 0.40 0.60-18 -20-14 10-year 1.11 1.10 1.25 1.55-7 +2 +21 DKK swap curve one month change 2.0 % bp 4 1.5 2 0 1.0-2 -4 0.5-6 0.0-8 0 3 6 9 12 15 18 21 24 27-10 -0.5-12 Change,bp (rhs) 16-Feb-17 16-Mar-17 3M Cibor rate 10Y DKK swap rates 9 17 March 2017 www.danskeresearch.com

Sweden forecasts We are nearing the important April Riksbank meeting. In our view, the Riksbank is likely to give at least some form of guidance on QE in government bonds, scheduled to finish (not including reinvestments) at end-june. In our view, it remains a close call whether the QE programme will be extended or not, as the medium-term outlook for inflation is still subdued given that we see no uptick in wage-driven inflation. However, our base case is that the Riksbank will end QE, partly for technical reasons as it holds close to 40% of the outstanding amount. This is likely to put some steepening pressure on the yield curve and the 7-10Y segment could be the most affected. More support measures remain possible. The easiest alternative for the Riksbank is once again to postpone future rate hikes. The SEK remains a risk factor for the Riksbank, as rapid appreciation could reverse the uptick in imported inflation. In an international comparison, the SEK yield curve remains very steep up to 5Y. This is difficult to reconcile with our medium-term view on inflation. SEK forecasts summary 16/03/2017 --- Forecast --- --- Fcst vs Fwd in bp --- SEK Spot +3m +6m +12m +3m +6m +12m Money market Repo -0.50-0.50-0.50-0.50 - - - 3M -0.48-0.50-0.50-0.50-4 -9-27 Government bonds 2-year -0.55-0.60-0.60-0.50 - - - 5-year 0.10 0.10 0.15 0.35 - - - 10-year 0.78 0.85 0.95 1.20 - - - Swap rates 2-year -0.23-0.40-0.40-0.30-27 -39-54 5-year 0.47 0.45 0.45 0.60-12 -23-30 10-year 1.29 1.35 1.45 1.60-2 +0-1 SEK swap curve one month change 2.5 % bp 0 2.0-2 1.5-4 1.0-6 0.5 0.0-8 -0.5-10 -1.0 0 3 6 9 12 15 18 21 24 27-12 Change,bp (rhs) 16/02/2017 16/03/2017 3M Stibor rate 10Y SEK swap rates 10 17 March 2017 www.danskeresearch.com

Norway forecasts At the recent policy meeting on 16 March, Norges Bank signalled no change in the target rate in 2017 from the present 0.50%. However, the bank s economic projections suggest a non-negligible probability of a cut, mainly reflecting the significant fall seen in core inflation over the past couple of months. The accommodating monetary policy has fuelled the Oslo housing market to the extreme. This appears to be a major long-run risk to financial stability and strongly suggests that Norges Bank should refrain, if possible, from cutting rates. We forecast unchanged central bank rates on a 12M horizon. Note that 3M Nibor has fallen recently. It reflects the cheaper USD liquidity, which directly affects Nibor fixings. We expect 5Y and 10Y yields to be stable versus peers in 2017, as the Norwegian economy is slowly improving but is still not out of the woods following the oil investment downturn. The positive outlook could trigger some inflow into the Norwegian government bond market and tighten the spread to Germany more than we forecast. NOK forecasts summary 16/03/2017 --- Forecast --- --- Fcst vs Fwd in bp --- NOK Spot +3m +6m +12m +3m +6m +12m Money market Deposit 0.50 0.50 0.50 0.50 - - - 3M 0.94 0.90 0.90 0.90-12 -10-19 Government bonds 2-year 0.65 0.65 0.75 1.00 - - - 5-year 1.04 1.15 1.20 1.45 - - - 10-year 1.81 1.80 2.00 2.30 - - - Swap rates 2-year 1.22 1.25 1.35 1.60-2 +3 +15 5-year 1.61 1.70 1.75 2.00 +3 +2 +15 10-year 2.06 2.10 2.30 2.60 +0 +16 +39 NOK swap curve one month change 2.7 % bp 6 4 2.2 2 1.7 0-2 1.2-4 -6 0.7-8 0 3 6 9 12 15 18 21 24 27 Change,bp (rhs) 16/02/2017 16/03/2017 3M Nibor rate 10Y NOK swap rates 11 17 March 2017 www.danskeresearch.com

Forecasts table Forecasts table USD EUR * GBP NOK SEK DKK Horizon Policy rate 3m xibor 2-yr swap 5-yr swap 10-yr swap 2-yr gov 5-yr gov 10-yr gov Spot 1.00 1.14 1.67 2.15 2.50 1.33 2.03 2.52 +3m 1.00 1.47 1.70 2.10 2.45 1.40 2.00 2.50 +6m 1.25 1.58 1.75 2.30 2.65 1.50 2.20 2.70 +12m 1.75 1.95 2.25 2.50 3.00 2.00 2.40 3.00 Spot 0.00-0.33-0.10 0.27 0.87-0.79-0.32 0.46 +3m 0.00-0.35-0.10 0.15 0.85-0.80-0.45 0.45 +6m 0.00-0.35-0.10 0.20 1.00-0.70-0.40 0.60 +12m 0.00-0.35 0.00 0.40 1.30-0.60-0.20 0.90 Spot 0.25 0.34 0.63 0.91 1.29 0.10 0.62 1.27 +3m 0.25 0.35 0.60 0.90 1.25 0.15 0.60 1.25 +6m 0.25 0.35 0.60 1.00 1.55 0.15 0.65 1.50 +12m 0.25 0.36 0.60 1.15 1.85 0.20 0.90 1.80 Spot 0.05-0.25 0.06 0.46 1.11-0.53-0.16 0.73 +3m 0.05-0.25 0.05 0.35 1.10-0.55-0.25 0.70 +6m 0.05-0.25 0.05 0.40 1.25-0.45-0.20 0.85 +12m 0.05-0.25 0.15 0.60 1.55-0.35 0.00 1.15 Spot -0.50-0.48-0.23 0.47 1.28-0.55 0.10 0.78 +3m -0.50-0.50-0.40 0.45 1.35-0.60 0.10 0.85 +6m -0.50-0.50-0.40 0.45 1.45-0.60 0.15 0.95 +12m -0.50-0.50-0.30 0.60 1.60-0.50 0.35 1.20 Spot 0.50 0.94 1.22 1.61 2.06 0.65 1.04 1.81 +3m 0.50 0.90 1.25 1.70 2.10 0.65 1.15 1.80 +6m 0.50 0.90 1.35 1.75 2.30 0.75 1.20 2.00 +12m 0.50 0.90 1.60 2.00 2.60 1.00 1.45 2.30 * German government bonds are used, EUR swap rates are used 12 17 March 2017 www.danskeresearch.com

Disclosures This research report has been prepared by Danske Bank Markets, a division of Danske Bank A/S ( Danske Bank ). The authors of the research report are Arne Lohmann Rasmussen, Chief Analyst, and Nina T. B. Andersen Assistant 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. Danske Bank s research reports 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 as sensitivity analysis of relevant assumptions, are stated throughout the text. Expected updates Monthly. 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. 13 17 March 2017 www.danskeresearch.com

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