Dec 14, 2017 - For the next six months we expect 10Y rates to range-trade close to the current level, albeit with a tend
Investment Research — General Market Conditions
14 December 2017
Yield Outlook Central bank exit but only modestly higher long yields On 30 November we published Special Report: The euro exit and what it implies for markets. In this report we argue that the ‘extraordinary’ is set to become ‘ordinary’ with policy rates remaining at ultra-low levels for a very long time.
Quick links
We assume that the ECB is set to embark on a very careful exit strategy, ending its QE purchases in December 2018 and a very gradual hiking cycle in Q2 19. We expect the ECB’s policy rate to converge towards 1.5% over the next four to five years. Furthermore, we argue that the ‘new normal’ for monetary policy in the euro area involves a large ECB balance sheet even if the economic situation normalises, due to the impact of regulatory changes on the monetary transmission mechanism.
US forecasts
Importantly, we expect policy rates to remain substantially below pre-crisis levels due to a lower natural rate of interest. Basically, we subscribe to the view that the natural rate of interest or r* has been falling steadily over the past 20 years and that it will continue to stay low in the near future, especially in Europe. Hence, despite our 12-month forecast now covering December 2018, when the ECB’s QE is about to come to an end and when the first, albeit small, rate hike is expected on a sixmonth horizon, we continue to see only relatively modest upside for both the USD and 10Y yields. We expect the 10Y EUR swap rate to rise from 0.8% to 1.20% and the 10Y USD swap rate to rise from 2.40% to 2.70%. For the next six months we expect 10Y rates to range-trade close to the current level, albeit with a tendency to edge slowly higher.
Market still priced too soft in US – flatter 2Y10Y curve in USD We have seen a continued rise in 3M USD Libor 3M rates in Q4 as the market has ‘prepared’ for the December rate hike and USD liquidity has become more ‘expensive’, which tends to push Libor fixings higher. We have also seen that the market prices in rate hikes in 2018 more aggressively. However, the effect on the long-end of the US curve has been modest and the US curve has continued to flatten. The curve has flattened in the US (%)
Eurozone forecasts
UK forecasts Denmark forecasts Sweden forecasts Norway forecasts Forecasts table
Policy rate outlook Country
Spot
+3m
+6m
+12m
USD EUR GBP DKK
1.50 -0.40 0.50 -0.65
1.50 -0.40 0.50 -0.65
1.75 -0.40 0.50 -0.65
1.75 -0.40 0.50 -0.65
SEK NOK
-0.50 0.50
-0.50 0.50
-0.50 0.50
-0.50 0.75
Source: Danske Bank
10-year government bond yield outlook Country
Spot
+3m
+6m
+12m
USD GER GBP
2.38 0.31 1.22
2.40 0.40 1.30
2.45 0.50 1.45
2.70 0.70 1.70
DKK SEK
0.42 0.71
0.55 0.75
0.65 0.75
0.85 0.90
NOK
1.50
1.65
1.75
2.10
Note: EUR = Germany Source: Danske Bank
Chief Analyst Arne Lohmann Rasmussen +45 45 12 85 32
[email protected]
Source: Danske Bank
Important disclosures and certifications are contained from page 11 of this report.
Assistant Analyst Morten Ehlers +45 45 12 82 87
[email protected]
www.danskeresearch.com
Yield Outlook
The flattening of the US curve in 2017 is reminiscent of the 2004-06 experience when the Fed hiked 17 times and the curve still flattened by 250bp. This development was famously named the ‘bond yield conundrum’ by Federal Reserve Chairman Greenspan in his 16 February 2005 testimony, as he rejected a variety of possible explanations such as a savings glut in Asia, lower inflation expectations and a weaker growth outlook. However, in Strategy: ‘Bond yield conundrum vol.2’, 30 November, we argue that a lower ‘term’ premium (the extra premium investors demand to invest in, e.g. a 10Y bond instead of 10 1Y bonds over the next 10 years) as well as foreign demand explain the low 10Y rates despite the move higher in USD Libor fixings. Markets have nearly priced in two hikes in 2018 but seem to more or less believe that the hiking cycle ends by end-2018 or early 2019. We disagree and think the hiking cycle has a little further to go and see two further hikes in 2019. Hence, we still see a case for a Fed repricing next year in 2019, pushing 2Y yields higher, and therefore we continue to expect a flattening of the curve for the 2Y10Y on a 12M horizon.
Modest steepening of the 2Y10Y curve in Germany In Germany, we expect a modestly steeper yield curve for the 2Y10Y in 2018. We expect the ECB to maintain a tight grip on the short end of the curve in 2018. However, this is not the case for the 10Y segment of the curve, which we expect to be pushed by higher US yields and the end of the QE programme. We have a 12M 0.70% forecast for 10Y Germany. However, we may be underestimating the downward pressure on 10Y yields in Germany from the continued ECB purchases, which now include a growing amount of reinvestment from bonds maturing. The healthy German economy also implies that the funding need – and henceforth bond issuance –will be modest in 2018. Finally, the German curve and the EUR swap curve are already steep relative to the US curve. It limits the steepening potential in Germany/EUR swaps. These curves could potentially see a European ‘conundrum’ in 2018 as the ‘exit’ from the ECB moves closer, given our view on the natural rate of interest or r* for the eurozone. We see a modest upward pressure on 10Y yields both in Germany and the US in 2018
Source: Danske Bank
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Yield Outlook
Contents and contributors Eurozone .......................................................................................................................................................................................................................................................................4 Macro
Senior Analyst
Aila Mihr
+45 45 12 85 35
Interest rates
Chief Analyst
Arne Lohmann Rasmussen +45 45 12 85 32
[email protected] [email protected]
US .......................................................................................................................................................................................................................................................................................5 Macro & interest rates
Senior Analyst
Mikael Olai Milhøj
Interest rates
Chief Analyst
Arne Lohmann Rasmussen +45 45 12 85 32
+45 45 12 76 07
[email protected] [email protected]
UK .......................................................................................................................................................................................................................................................................................6 Macro & interest rates
Senior Analyst
Morten Helt
+45 45 12 85 18
[email protected]
Denmark ........................................................................................................................................................................................................................................................................7 Macro
Chief Economist
Las Olsen
Interest rates
Chief Analyst
Arne Lohmann Rasmussen +45 45 12 85 32
+45 45 12 85 36
[email protected] [email protected]
Sweden ...........................................................................................................................................................................................................................................................................8 Macro & interest rates
Chief Analyst
Michael Boström
+46 (0)8-568 805 87
[email protected]
Senior Analyst
Michael Grahn
+46 (0)8-568 807 00
[email protected]
Senior Analyst
Marcus Söderberg
+46 (0)8-568 805 64
[email protected]
Senior Analyst
Carl Milton
+46 (0)8-568 805 98
[email protected]
Norway ...........................................................................................................................................................................................................................................................................9 Macro & interest rates
Chief Analyst
Jostein Tvedt
+47 23 13 91 84
[email protected]
Forecasts table .................................................................................................................................................................................................................................................... 10
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Yield Outlook
Eurozone forecasts
Continued strong PMIs and economic confidence at the highest level in 17 years point to an ongoing expansion in the euro area, and we have recently revised up our growth forecast to 2.0% in 2018 and 1.8% in 2019 (see The Big Picture: Global economy still on a roll, 4 December). However, despite the strong economic momentum inflation pressures remain subdued with November headline and core inflation coming in below expectations at 1.5% and 0.9%, respectively.
Supported by the closing output gap, we expect core inflation to stay above 1.0% in 2018, but also not to accelerate much further from here without higher wage growth. We still think the ECB is too optimistic on its outlook for core inflation, which we expect to average only 1.1% in 2018 (see also Euro Area Research: ECB inflation gap persists in 2019, 4 December). That said, consensus seems to be growing in the Governing Council that the October QE extension was the last one, as the ECB is increasingly shifting towards a more holistic view of the economy and inflation.
We continue to expect a modestly steeper EUR yield curve for the 2Y10Y in 2018. The ECB maintains a tight grip on the short end of the curve. However, this is not the case for the 10Y segment of the curve, which we expect to be pushed by higher US yields and a smaller QE programme. We have a 12M 0.70% forecast for 10Y Germany.
EUR forecast summary
EUR swap curve – one-month change
14/12/2017 EUR
--- Forecast --Spot +3m +6m
Refi
0.00
0.00
0.00
0.00
-
-
-
Deposit
-0.40
-0.40
-0.40
-0.40
-
-
-
3M
-0.33
-0.33
-0.33
-0.33
+0
-1
-6
+12m
--- Fcst vs Fwd in bp --+3m +6m +12m
Money market
2.0 %
bp 5
1.5
0
1.0
-5
0.5
Government bonds 2-year
-0.74
-0.65
-0.60
-0.55
-
-
-
5-year
-0.36
-0.25
-0.20
-0.10
-
-
-
10-year
0.31
0.40
0.50
0.70
-
-
-
-0.5
Swap rates 2-year
-0.19
-0.10
-0.05
-0.05
+4
+4
5-year
0.21
0.25
0.30
0.40
-2
-3
-6
10-year
0.80
0.90
1.00
1.20
+4
+9
+18
-10
0.0 0
3
6
9 12 15 18 21 24 27
Change,bp (rhs)
14-Nov-17
Source: Danske Bank
Source: Danske Bank
3M Euribor
10Y EUR swap rates
Source: Macrobond Financial, Danske Bank
Source: Macrobond Financial, Danske Bank
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-15
-9
14-Dec-17
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Yield Outlook
US forecasts
As expected, the Fed raised the target range by 25bp to 1.25-1.50% at its Decembermeeting. The Fed still signals three additional hikes next year and slightly more than two hikes in 2019. The longer-run median dot was unchanged at 2.75%. For more see FOMC review, 13 December.
Although uncertainty is higher than usual with a new Fed Chair and still many vacant seats in the Fed Board of Governors, Powell is considered to be in the same ‘neutral’ camp as Yellen. Consensus is calling for three hikes but we expect inflation to remain muted, so we are calling for one less in our base case scenario (although risk is currently skewed towards a third one, as the Fed puts more weight on labour market data than inflation).
Markets have nearly priced in two hikes in 2018 but more or less think the hiking cycle ends by the end of 2018 or early 2019. We disagree and think the hiking cycle has a little further to go and see two further hikes in 2019. Hence we still see a case for a Fed repricing next year in 2019 pushing 2Y yields higher. We continue to expect a flattening of the curve for the 2Y10Y on a 12M horizon. The short end is pushed higher by Fed rate hikes, while the long end could be kept low by investors buying ‘high yielding’ US fixed income assets, low inflation expectations and a lower neutral rate.
USD forecast summary
USD swap curve – one-month change
14/12/2017 USD
--- Forecast --Spot +3m +6m
Fed Funds
1.50
1.50
1.75
3M
1.57
1.58
1.75
+12m
--- Fcst vs Fwd in bp --+3m +6m +12m
Money market 1.75
-
-
-
2.04
-22
-20
-5
Government bonds 2-year
1.81
1.90
2.00
2.30
-
-
-
5-year
2.15
2.10
2.20
2.50
-
-
-
10-year
2.38
2.40
2.45
2.70
-
-
-
Swap rates 2-year
2.01
2.15
2.25
2.55
+5
+9
+31
5-year
2.21
2.20
2.30
2.60
-5
+2
+27
10-year
2.38
2.35
2.40
2.70
-6
-3
+23
3.0 %
bp 20
2.5
15
2.0
10
1.5
5
1.0
0
0.5
-5
0.0
-10 0
3
6
9 12 15 18 21 24 27
Change,bp (rhs)
14-Nov-17
Source: Danske Bank
Source: Danske Bank
3M USD Libor rates
10Y USD swap rates
Source: Macrobond Financial, Danske Bank
Source: Macrobond Financial, Danske Bank
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Yield Outlook
UK forecasts
As expected, Bank of England (BoE) maintained the Bank Rate unchanged at 0.50% at the December meeting. It was one of the small meetings without updated projections and a press conference but the signal in the minutes was broadly unchanged. This was not a big surprise either since economic data have been in line with projections (more or less). BoE noted that the EU/UK Brexit deal on phase 1 (divorce bill, Irish border and citizens’ rights) was supportive for consumer and business confidence but that uncertainty remains high.
CPI inflation rose to 3.1% y/y in November due to higher energy prices. The increase in inflation should be temporary as much is due to the past weakening of the GBP and higher commodity prices. In our view, BoE is still too optimistic on wage growth and hence underlying wage growth and we continue to think the BoE will not hike again before Q1 19. Economists are divided on whether BoE hikes in Q4 18 or Q1 19, while markets have priced in the first hike in Q4 18.
•
We see market pricing as slightly on the hawkish side pointing to some downside risk in the 0-2Y segment in coming months. Further out on the yield curve, we look for yields to trade around current levels in coming months. On a 6-12M horizon, we expect the 2Y10Y yield curve to steepen moderately, with the long end of the curve being driven by higher yields in the US and Europe.
UK forecast summary 14/12/2017 GBP
UK swap curve – one-month change
--- Forecast --Spot +3m +6m
+12m
--- Fcst vs Fwd in bp --+3m +6m +12m
Money market Repo
0.50
0.50
0.50
0.50
-
-
-
3M
0.52
0.53
0.53
0.64
-4
-15
-19
2-year
0.49
0.50
0.55
0.75
-4
-
+12
5-year
0.75
0.80
0.90
1.15
-7
-2
+14
10-year
1.22
1.30
1.45
1.70
-1
+10
+25
2-year
0.81
0.85
0.90
1.10
-3
-4
+5
5-year
1.07
1.15
1.20
1.45
+4
+5
+23
10-year
1.30
1.35
1.50
1.75
+2
+14
+34
2.0 %
bp 0
-2 -4 -6 -8 -10 -12 -14
1.5 1.0
Government bonds
Swap rates
0.5
0.0 0
3
6
9 12 15 18 21 24 27
Change,bp (rhs)
14-Nov-17
Source: Danske Bank
Source: Danske Bank
3M GBP Libor rates
10Y UK swap rates
Source: Macrobond Financial, Danske Bank
Source: Macrobond Financial, Danske Bank
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Yield Outlook
Denmark forecasts
We do not expect rate changes from the Danish central bank over the next 12 months. If anything, we could see the central bank intervening in the market to weaken the DKK, as fundamentals such as the significant current account surplus tend to strengthen the DKK. The 3M Cibor-Euribor has tightened this year. High liquidity in the money market is dragging Cita rates lower and Cibor fixings down. We expect DKK fixings to remain at the current level or fall to a slightly lower level for the time being.
This year DKK swap rates have continued to tighten versus EUR swap rates – 10Y and 5Y5Y spreads in particular have tightened. We could see a continuation of this overall trend but we are probably approaching levels where we should not expect any significant tightening.
Danish government bonds have also tightened versus those of Germany this year. However, the Danish Debt Office has announced that the government will buy back the new government guaranteed bonds that will fund social housing. It means that supply will be higher than previously expected and that the risk of spread-widening between Denmark and Germany has become higher. Our base scenario expects the bond yield spread to Germany to remain at more or less the current level.
DKK forecast summary 14/12/2017 DKK
DKK swap curve – one-month change
--- Forecast --Spot +3m +6m
+12m
--- Fcst vs Fwd in bp --+3m +6m +12m
Money market CD
-0.65
-0.65
-0.65
-0.65
-
-
-
Repo
0.05
0.05
0.05
0.05
-
-
-
3M
-0.30
-0.30
-0.30
-0.30
-1
-2
-9
6M
-0.16
-0.15
-0.15
-6
-9
-15
2-year
-0.50
-0.45
-0.40
-0.35
-
-
-
5-year
-0.09
0.00
0.05
0.15
-
-
-
10-year
0.41
0.55
0.65
0.85 Swap rates
-
-
-
2-year
-0.06
0.05
0.10
0.15
+7
+6
-3
5-year
0.36
0.40
0.45
0.60
-2
-4
-2
10-year
0.98
1.10
1.20
1.45
+6
+11
+25
-0.12 Government bonds
2.0 %
bp 5
1.5
0
1.0
-5
0.5
-10
0.0 -0.5
-15 0
3
6
9 12 15 18 21 24 27
Change,bp (rhs)
14-Nov-17
Source: Danske Bank
Source: Danske Bank
3M Cibor rate
10Y DKK swap rates
Source: Macrobond Financial, Danske Bank
Source: Macrobond Financial, Danske Bank
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-20
14-Dec-17
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Yield Outlook
Sweden forecasts
As year-end nears we are approaching the Riksbank’s decision on whether to continue purchasing bonds or not. Our guess is that the QE-programme is about to end but we acknowledge that it is a close call. In any case, minutes from the Riksbank’s October meeting reveals that three (out of six) members leaned towards ending. Inflation outcomes have been broadly in line with the Riksbank’s forecasts.
However, note that bond issuance has been scaled back, which partially dampens the potential for higher long-term rates resulting from a decision by the Riksbank to stop buying bonds. In particular the stock of bills has been slashed to an all-time low, implying a looming shortage of short material probably also indirectly affecting shortdated swaps.
The housing market remains in focus with few signs of a turnaround in the short term. The underlying factor is recent years’ significant supply of new (mostly rather expensive) flats, a supply that will continue to grow for some time considering already started projects. Rates (unlike the SEK) have not responded much yet, but if the weakness is sustained it will likely impact future rate hikes.
SEK forecast summary 14/12/2017 SEK
SEK swap curve – one-month change
--- Forecast --Spot +3m +6m
+12m
--- Fcst vs Fwd in bp --+3m +6m +12m
Money market Repo
-0.50
-0.50
-0.50
-0.50
-
-
-
3M
-0.60
-0.50
-0.45
-0.45
-8
-9
-20
2-year
-0.84
-0.50
-0.50
-0.50
-
-
-
5-year
-0.21
-0.10
-0.10
0.00
-
-
-
10-year
0.71
0.75
0.75
0.90
-
-
-
Government bonds
Swap rates 2-year
-0.23
-0.05
-0.05
-0.05
+8
-1
-21
5-year
0.35
0.35
0.35
0.40
-9
-19
-32
10-year
1.09
1.15
1.15
1.25
-1
-8
-12
2.5 % 2.0 1.5 1.0 0.5 0.0 -0.5 -1.0 0
bp 4
3
6
9 12 15 18 21 24 27
Change,bp (rhs)
14-Nov-17
Source: Danske Bank
Source: Danske Bank
3M Stibor rate
10Y SEK swap rates
Source: Macrobond Financial, Danske Bank
Source: Macrobond Financial, Danske Bank
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2 0 -2 -4 -6 -8 -10 -12
14-Dec-17
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Yield Outlook
Norway forecasts
Norges Bank turned more hawkish in the 14 December Monetary Policy Report 4/17. It moved the first hike in the sight deposit rate from mid-2019 to the end of 2018 or early 2019. A weak NOK is a key factor for the upward revision, whereas the uncertainty related to the effects of monetary policy implies that it will have ‘a cautious approach in the interest rate setting’. We expect the first hike in December 2018.
Recent data confirm the recovery case for the Norwegian economy. Q3 mainland GDP grew 0.6% q/q, i.e. in line with growth in the first half of the year. Growth is broad based. Consumer confidence is strong. The upward trend in Norwegian PMI seems intact, despite substantial volatility in the index.
Mortgage market regulations, introduced at the start of the year, seem to be cooling the housing market – particularly in the Oslo area. We do not expect the recent slowdown in the housing market to have a significant effect on monetary policy, as so far it is in line with Norges Bank’s expectations. We expect 5Y and 10Y yields to be stable versus peers in 2017, as the Norwegian economy is improving slowly. However, on a 12M horizon, we could see a modest widening versus peers.
NOK forecast summary
NOK swap curve – one-month change
14/12/2017 NOK
--- Forecast --Spot +3m +6m
Deposit
0.50
0.50
0.50
0.75
-
-
-
3M
0.85
0.80
0.80
1.10
-6
-8
+12
2-year
0.65
0.65
0.70
0.90
-
-
-
5-year
1.04
1.05
1.10
1.30
-
-
-
10-year
1.50
1.65
1.75
2.10
-
-
-
-4
-5
+2
+12m
--- Fcst vs Fwd in bp --+3m +6m +12m
Money market
Government bonds
Swap rates 2-year
1.07
1.10
1.15
1.35
5-year
1.43
1.45
1.50
1.70
-4
-4
+5
10-year
1.85
2.00
2.10
2.45
+11
+17
+44
2.3 % 2.1 1.9 1.7 1.5 1.3 1.1 0.9 0.7 0
bp 4
2 0
-2 -4
-6 -8
3
6
9 12 15 18 21 24 27
Change,bp (rhs)
14-Nov-17
Source: Danske Bank
Source: Danske Bank
3M Nibor rate
10Y NOK swap rates
Source: Macrobond Financial, Danske Bank
Source: Macrobond Financial, Danske Bank
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Yield Outlook
Forecasts
NOK
SEK
DKK
GBP
EUR *
USD
Forecasts Horizon
Policy rate
3m xIbor
2-yr swap
2-yr gov
5-yr gov
10-yr gov
Spot
1.50
1.57
2.01
5-yr swap 10-yr swap 2.21
2.38
1.81
2.15
2.38
+3m
1.50
1.58
2.15
2.20
2.35
1.90
2.10
2.40
+6m
1.75
1.75
2.25
2.30
2.40
2.00
2.20
2.45
+12m
1.75
2.04
2.55
2.60
2.70
2.30
2.50
2.70
Spot
-0.40
-0.33
-0.19
0.21
0.80
-0.74
-0.36
0.31
+3m
-0.40
-0.33
-0.10
0.25
0.90
-0.65
-0.25
0.40
+6m
-0.40
-0.33
-0.05
0.30
1.00
-0.60
-0.20
0.50
+12m
-0.40
-0.33
-0.05
0.40
1.20
-0.55
-0.10
0.70
Spot
0.50
0.52
0.81
1.07
1.30
0.49
0.75
1.22
+3m
0.50
0.53
0.85
1.15
1.35
0.50
0.80
1.30
+6m +12m
0.50 0.50
0.53 0.64
0.90 1.10
1.20 1.45
1.50 1.75
0.55 0.75
0.90 1.15
1.45 1.70
Spot
-0.65
-0.30
-0.06
0.37
0.99
-0.50
-0.08
0.42
+3m
-0.65
-0.30
0.05
0.40
1.10
-0.45
0.00
0.55
+6m
-0.65
-0.30
0.10
0.45
1.20
-0.40
0.05
0.65
+12m
-0.65
-0.30
0.15
0.60
1.45
-0.35
0.15
0.85
Spot
-0.50
-0.60
-0.23
0.35
1.09
-0.84
-0.21
0.71
+3m
-0.50
-0.50
-0.05
0.35
1.15
-0.50
-0.10
0.75
+6m
-0.50
-0.45
-0.05
0.35
1.15
-0.50
-0.10
0.75
+12m
-0.50
-0.45
-0.05
0.40
1.25
-0.50
0.00
0.90
Spot
0.50
0.85
1.07
1.43
1.85
0.65
1.04
1.50
+3m
0.50
0.80
1.10
1.45
2.00
0.65
1.05
1.65
+6m
0.50
0.80
1.15
1.50
2.10
0.70
1.10
1.75
+12m
0.75
1.10
1.35
1.70
2.45
0.90
1.30
2.10
* German government bonds are used, EUR swap rates are used Source: Danske Bank
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Disclosures This research report has been prepared by Danske Bank A/S (‘Danske Bank’). The author of this research report is Arne Lohmann Rasmussen, 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. 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.
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Disclaimer related to distribution in the United States This research report was created by Danske Bank A/S and is distributed in the United States by Danske Markets Inc., a U.S. registered broker-dealer and subsidiary of Danske Bank A/A, pursuant to SEC Rule 15a-6 and related interpretations issued by the U.S. Securities and Exchange Commission. The research report is intended for distribution in the United States solely to ‘U.S. institutional investors’ as defined in SEC Rule 15a-6. Danske Markets Inc. accepts responsibility for this research report in connection with distribution in the United States solely to ‘U.S. institutional investors’. Danske Bank is not subject to U.S. rules with regard to the preparation of research reports and the independence of research analysts. In addition, the research analysts of Danske Bank who have prepared this research report are not registered or qualified as research analysts with the NYSE or FINRA but satisfy the applicable requirements of a non-U.S. jurisdiction. Any U.S. investor recipient of this research report who wishes to purchase or sell any Relevant Financial Instrument may do so only by contacting Danske Markets Inc. directly and should be aware that investing in non-U.S. financial instruments may entail certain risks. Financial instruments of non-U.S. issuers may not be registered with the U.S. Securities and Exchange Commission and may not be subject to the reporting and auditing standards of the U.S. Securities and Exchange Commission.
Report completed: 14 December 2017, 14:38 CET Report first disseminated: 14 December 2017, 18:00 CET
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