DCSIMG

Inflation up – from the temporary dip

Erik BruceThe May inflation readings are due out on 11 June. It will be the last important domestic news before Norges Bank publishes its new interest rate forecast the 20 June. We expect core inflation (CPI-ATE inflation) to rebound to 1.2% y/y after the low April figure. That is in line with Norges Bank’s view and nothing much would probably happen in the market (but consensus is not yet known). If inflation, contrary to our forecast, should rebound fully after the April drop core inflation will be 1.5%. In that case NOK should strengthen and forward rates rise.

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• Kerry warns Russia to tone down its rhetoric • Chinese PMI looks set to rise

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FI Eye-Opener: China not rebounding like it used to

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RUB has been under pressure recently as tsunami of capital outflow, caused by the threat of sanctions against Russia, washed away optimists and buyers of RUB-denominated assets. The pace of capital outflow increased in Q1 2014, reaching unimaginable $51 bn. (compared with $62.7 bn. in 2013). The volatility stays high on the Russian markets and the rouble remains focused on geopolitics.

Sweden: March Labour Force Survey better than it seems

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Swedish Morning Briefing - Tuesday 22 April

• Deal clinched during Geneva meeting • Ingves says deflation not likely

FI Eye-Opener: Portuguese bond auctions back

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The latest Euro Rates Update is now available

Swedish Morning Briefing - Thursday 17 April

• Separatists in Donetsk plan for a local referendum • A summit in Geneva to discuss the crisis in Ukraine

FI Eye-Opener: Easter bunnies to boost bonds today

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Swedish Morning Briefing - Wednesday 16 April

• Putin urges UN to condemn Ukraine’s intervention • Chinese growth at weakest level for six quarters