Morning Report

30.07.2013

ECB meeting minutes to be published?

7.90
7.70

7.50 02-Jul 16-Jul

1.90 1.80 1.70 1.60 1.50 30-Jul

Yesterdays double interview with European Central Bank (ECB) directors Cur and Asmussen indicate that the ECB will soon begin to publish the minutes of its monetary policy meetings. Yesterday, Le Figaro and Sddeutsche Zeitung published a double interview with French Benoit Cur and German Jrg Asmussen, both members of the ECBs board of directors. The interview was also published on the ECB's website, and was consequently given a more official status. The interview deals with several issues, but particularly worth noting is that both Cur and Asmussen argues that for the ECB to be transparent and be accountable it should publish the minutes of its meetings, disclosing who voted for what, and the motivation behind this vote. According to Cur, this should happen "soon". When the interviewer asks if there is a majority for such a decision, Asmussen answers that "Every majority starts as minority. It is an ongoing discussion in the Council. Cur links the desire for more transparency to ECBs decision at its last monetary policy meeting, 4 July, to begin using forward guidance by specifying that the interest rate would be at the current level or lower for a long time ("Extended Period of Time"). When interest rates already are very low, and it is fairly obvious that further rate cuts wont help much, while the ECB cannot, or do not want to implement massive asset purchases, improved communication may provide enhance the efficacy of monetary policy. By promising low rates for a long period of time, interest rates with longer maturities are affected, but also the private sectors willingness to invest. By publishing the meeting minutes, monetary policy may be clearer for the many who will be affected by it. When Cur and Asmussen feel confident enough to assert that a minority view soon will be a majority decision, the decision cannot be far off. The two must have support from Draghi and several others in the ECB Council. It could well be that the minutes from the September and October meetings will be published. Norwegian housing starts are still trending down: In June, almost 2,500 new homes were started, which corresponds to a seasonally adjusted annualized level of close to 30,000. But the trend is declining. Statistics Norway estimates the trend at just under 28,000 new homes now, compared to around 32,000 homes less than a year ago. Other construction remains fairly buoyant, however, with a 3% rise in non-housing starts from the first half of last year to the first half of this year. Japanese industrial production disappointed in June. A drop of 3.3% from the previous month was almost twice as much as expected. The decline was particularly strong for export-oriented industries, thus corresponding well with the export decline in June. Companies see slowdown as temporary, however, indicating 6.5% production growth in July according to the METI survey. China's central bank this morning injected liquidity to the money market for the first time since February, with 17 billion yuan in a seven-day repo. This lowered short-term rates by 10-15 basis points. The interest rate was set at a high 4.4%. On the one hand, credit should be tightened to avoid excesses and overheating. On the other, authorities want to avoid a similar squeeze in the money market as in June. Volatility and uncertainty are not desirable. The liquidity supply is probably the main reason for the rise in Asian stock markets in the morning hours today. The Nikkei index is at the time of writing up 1.2%. While US markets closed down yesterday, European markets closed about sideways. Similarly, movements in interest and foreign exchange markets are small. Markets are awaiting monetary policy meetings of the Fed, ECB and BoE Wednesday and Thursday, and key figures in the coming days. At 0930 today the first estimate of Swedish GDP in the second quarter will be published. On average, growth is projected at a modest 0.1% q/q, after a more robust 0.6% in the first quarter. The spread in estimates is considerable - from an expected increase of 0.5% to an expected decline of 0.3%. In its monetary policy report from July, Riksbanken estimated that GDP would grow by 0.3% q/q in the second quarter. In its report, the Swedish central bank signaled that the policy rate would remain unchanged until next autumn. If growth should be in line with market expectations, this strengthens the case for further rate cuts. DNB Markets estimate an increase of 0.4% q/q, and expects - like Riksbanken - no further Swedish rate cuts. Yesterday's retail sales data - with a surprisingly high growth of 0.6% from May to June points to higher GDP growth. [Link]@[Link] Yesterdays key economic events (GMT) 00:50 Japan Retail sales 07:30 Sweden Retail sales 14:00 USA Pending home sales Todays key economic events (GMT) 07:30 Sweden GNP 09:00 EZ Ec. sentiment 14:00 US Consumer confidence As of Jun Jun Jun As of Q2 Jul Jul Unit y/y % m/m % m/m % Unit q/q % Index Index Prior 0.8 0.9r 5.8r Prior 0.6 91.3 81.4 Poll 1.9 0.3 -1.0 Poll 0.1 92.6 81.4 Actual 1.6 0.6 -0.4 DNB 0.4

Norw ay: 10y Gov't Bond

125

105
85 16-Jul

65 30-Jul
Diff (bp, rha)

Headquarter Dronning Eufemias gate 30 0191 Oslo Offices Abroad New York London Singapore Stockholm Sales Oslo (+47) Equity Fixed Income Regional Sales (+47) Bergen Bod Fredrikstad Hamar Lillehammer Kristiansand Oslo Stavanger Troms Trondheim Tnsberg lesund Private Clients Research Regional Sales (+47) Eirik Larsen Research FX/IR (+47) ystein Drum Kjersti Haugland Ole Andr Kjennerud Knut A. Magnussen Camilla Viland Magne stnor Kyrre Aamdal Credit Research (+47) Ole Einar Stokstad Martin Brter Mikael L. Gjerding Rolv Kristian Heitmann Thomas Larsen Knut Olav Rnningen Kristina Solbakken Magnus Vie Sundal

+47 03000

+ 1 212 681 2550 +44 207 283 0050 +65 6220 6144 +46 84 73 48 50

22 94 89 40 24 16 90 30

56 13 27 20 75 52 99 10 69 39 41 50 62 54 14 82 61 24 79 56 38 14 61 64 24 16 90 80 51 84 04 30 77 64 76 30 73 87 49 73 33 01 73 80 70 11 69 85 24 16 90 90

24 16 90 77

24 16 90 08 24 16 90 03 24 16 90 07 24 16 90 04 24 16 90 01 24 16 90 06 24 16 90 02

24 16 90 48 24 16 90 46 24 16 90 47 24 16 90 49 24 16 90 44 24 16 90 45 24 16 90 51 24 16 91 23

Morning Report
30.07.2013

3m LIBOR
0.155 0.150 0.145 0.140 0.135 0.130 0.28 0.27 0.27 0.26 0.26 30-Jul
USD (rha)

02-Jul
EUR

16-Jul

Oil price & NOK TWI

105
100

FX 0700 USD/JPY EUR/USD EUR/GBP EUR/DKK EUR/SEK EUR/CHF EUR/NOK USD/NOK JPY/NOK SEK/NOK DKK/NOK GBP/NOK CHF/NOK

Last 97.90 1.3276 0.8635 7.4557 8.5954 1.2330 7.8493 5.9133 6.04 91.37 105.29 9.096 6.369

Today 98.35 1.3258 0.8649 7.4550 8.6042 1.2339 7.8810 5.9428 6.04 91.63 105.72 9.111 6.384

Spot rates and forecasts In 1m Oct-13 Jan-14 0.5 98 102 107 -0.1 1.30 1.26 1.30 0.2 0.85 0.85 0.86 0.0 7.45 7.45 7.45 0.1 8.55 8.45 8.50 0.1 1.24 1.25 1.27 0.4 7.80 7.70 7.70 0.5 6.00 6.11 5.92 0.0 6.12 5.99 5.54 0.3 91.2 91.1 90.6 0.4 104.7 103.4 103.4 0.2 9.18 9.06 8.95 0.2 6.29 6.16 6.06

Jul-14 FX 0700 110 AUD 1.32 CAD 0.87 CHF 7.45 CZK 8.60 RUB 1.30 GBP 7.70 HKD 5.83 KWD 5.30 LTL 89.5 LVL 103.4 NZD 8.85 SEK 5.92 SGD

USD 0.906 1.028 0.931 19.547 32.922 1.533 7.757 0.285 2.604 0.530 0.799 6.491 1.268

NOK 5.386 5.780 6.384 30.410 18.056 9.111 0.766 20.832 2.282 11.207 4.748 91.630 4.689

02-Jul

16-Jul

95 30-Jul
USD/b (rha)

NOK TWI

US dollar 6.4 6.2 6.0 5.8 5.6

1.35 1.33 1.31 1.29 1.27 1.25 30-Jul

NOK 1m 3m 6m 12m 3y 5y 7y 10y

Prior 1.65 1.72 1.78 1.91 2.12 2.56 2.93 3.28

Last 1.65 1.72 1.78 1.91 2.13 2.54 2.93 3.27

Interest rates SEK Prior Last USD 1m 1.10 1.10 1m 3m 1.19 1.19 3m 6m 1.28 1.28 6m 12m Invalid Invalid RIC(s): RIC. STISEK1YDFI= 12m 3y 1.67 1.67 3y 5y 2.11 2.11 5y 7y 2.40 2.40 7y 10y 2.67 2.67 10y

Prior 0.19 0.27 0.40 0.67 0.79 1.57 2.19 2.79

Last 0.19 0.27 0.40 0.67 0.75 1.51 2.14 2.75

EUR 1m 3m 6m 12m 3y 5y 7y 10y

Prior 0.08 0.15 0.25 0.47 0.70 1.16 1.55 1.98

Last 0.08 0.15 0.26 0.46 0.73 1.17 1.55 1.98 Last 98.50 1.67 -0.92 10y sw ap 1.75 1.75 2.00

102.0 100.0
98.0

Japanese yen

96.0 02-Jul
USDJ PY

16-Jul

7.0 6.5 6.0 5.5 5.0 30-Jul

Norw ay Prior NST475 94.33 10y yld 2.66 - US spread 0.11 3m nibor 1.55 1.55 1.55

Norw ay Oct-13 Jan-14 Jul-14

Governm ent bonds Last SEK Prior Last US Prior 94.25 10y 93.57 93.62 10y 93.06 2.67 10y yld 2.21 2.20 10y yld 2.55 0.09 - US spread -0.35 -0.39 30y yld 3.61 Interest rate forecasts 10y 10y Sw eden 3m libor USA 3m libor sw ap sw ap 3.00 3.00 3.25 Oct-13 Jan-14 Jul-14 1.25 1.25 1.25 2.25 2.25 2.50 Oct-13 Jan-14 Jul-14 0.30 0.35 0.35

Last Germany Prior 92.80 10y 98.50 2.59 10y yld 1.67 3.66 - US spread -0.89 10y sw ap 2.25 2.25 2.50 3m euribor 0.20 0.25 0.20

Germany Oct-13 Jan-14 Jul-14

JPYNOK(rha)

SEKNOK & CHFNOK

91
89

6.4
6.2

87 02-Jul
SEKNOK

16-Jul

6.0 30-Jul
CHFNOK (rha)

Equities
15700 15200 14700 14200 13700 02-Jul 16-Jul
Dow Jones

510 500 490 480 470 460 450 30-Jul

NOK sov. NST21 NST22 NST23 NST471 NST472 NST475 NST475 NST475 NOK FRA SEP DEC MAR JUN

Miscellaneous Prior Last Change Maturity year rem. NOK-index TWI Prior 1.60 1.61 1 18.12.2013 0.39 Last 95.75 95.44 1.46 1.41 -6 19.03.2014 0.64 Oil price: (Ldn,cl) 1m 1.52 1.52 0 18.06.2014 0.88 SPOT 107.91 107.32 1.45 1.45 0 15.05.2015 1.79 Gold price 29.07.2013 PM 1.73 1.75 1 19.05.2017 3.81 AM: 1331.0 1329.8 2.64 2.66 1 24.05.2023 9.82 Equities Today 0700 % last 2.64 2.66 1 24.05.2023 9.82 Dow Jones 15521.97 -0.2% 2.66 2.67 1 24.05.2023 9.82 Nasdaq C. 3599.14 -0.4% 3 mnd 6 mnd NOK NIDR NIBOR FTSE100 6560.25 0.1% 1.71 1.80 1m 1.75 1.65 Eurostoxx50 2741.73 0.0% 1.71 1.81 3m 1.82 1.72 DAX 8259.03 0.2% 1.72 1.86 6m 1.87 1.78 Nikkei 225 13869.82 1.5% 1.76 1.91 12m 2.00 1.91 OSEBX 494.25 0.0% Sources to all tables and graphics: Thomson Reuters, Thomson Datastream and DNB Markets

Morning Report
30.07.2013
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Morning Report
30.07.2013

3m LIBOR
0.155 0.150 0.145 0.140 0.135 0.130 0.28 0.27 0.27 0.26 0.26 30-Jul
USD (rha)

02-Jul
EUR

16-Jul

Oil price & NOK TWI

105
100

FX 0700 USD/JPY EUR/USD EUR/GBP EUR/DKK EUR/SEK EUR/CHF EUR/NOK USD/NOK JPY/NOK SEK/NOK DKK/NOK GBP/NOK CHF/NOK

Last 97.90 1.3276 0.8635 7.4557 8.5954 1.2330 7.8493 5.9133 6.04 91.37 105.29 9.096 6.369

Today 98.35 1.3258 0.8649 7.4550 8.6042 1.2339 7.8810 5.9428 6.04 91.63 105.72 9.111 6.384

Spot rates and forecasts In 1m Oct-13 Jan-14 0.5 98 102 107 -0.1 1.30 1.26 1.30 0.2 0.85 0.85 0.86 0.0 7.45 7.45 7.45 0.1 8.55 8.45 8.50 0.1 1.24 1.25 1.27 0.4 7.80 7.70 7.70 0.5 6.00 6.11 5.92 0.0 6.12 5.99 5.54 0.3 91.2 91.1 90.6 0.4 104.7 103.4 103.4 0.2 9.18 9.06 8.95 0.2 6.29 6.16 6.06

Jul-14 FX 0700 110 AUD 1.32 CAD 0.87 CHF 7.45 CZK 8.60 RUB 1.30 GBP 7.70 HKD 5.83 KWD 5.30 LTL 89.5 LVL 103.4 NZD 8.85 SEK 5.92 SGD

USD 0.906 1.028 0.931 19.547 32.922 1.533 7.757 0.285 2.604 0.530 0.799 6.491 1.268

NOK 5.386 5.780 6.384 30.410 18.056 9.111 0.766 20.832 2.282 11.207 4.748 91.630 4.689

02-Jul

16-Jul

95 30-Jul
USD/b (rha)

NOK TWI

US dollar 6.4 6.2 6.0 5.8 5.6

1.35 1.33 1.31 1.29 1.27 1.25 30-Jul

NOK 1m 3m 6m 12m 3y 5y 7y 10y

Prior 1.65 1.72 1.78 1.91 2.12 2.56 2.93 3.28

Last 1.65 1.72 1.78 1.91 2.13 2.54 2.93 3.27

Interest rates SEK Prior Last USD 1m 1.10 1.10 1m 3m 1.19 1.19 3m 6m 1.28 1.28 6m 12m Invalid Invalid RIC(s): RIC. STISEK1YDFI= 12m 3y 1.67 1.67 3y 5y 2.11 2.11 5y 7y 2.40 2.40 7y 10y 2.67 2.67 10y

Prior 0.19 0.27 0.40 0.67 0.79 1.57 2.19 2.79

Last 0.19 0.27 0.40 0.67 0.75 1.51 2.14 2.75

EUR 1m 3m 6m 12m 3y 5y 7y 10y

Prior 0.08 0.15 0.25 0.47 0.70 1.16 1.55 1.98

Last 0.08 0.15 0.26 0.46 0.73 1.17 1.55 1.98 Last 98.50 1.67 -0.92 10y sw ap 1.75 1.75 2.00

102.0 100.0
98.0

Japanese yen

96.0 02-Jul
USDJ PY

16-Jul

7.0 6.5 6.0 5.5 5.0 30-Jul

Norw ay Prior NST475 94.33 10y yld 2.66 - US spread 0.11 3m nibor 1.55 1.55 1.55

Norw ay Oct-13 Jan-14 Jul-14

Governm ent bonds Last SEK Prior Last US Prior 94.25 10y 93.57 93.62 10y 93.06 2.67 10y yld 2.21 2.20 10y yld 2.55 0.09 - US spread -0.35 -0.39 30y yld 3.61 Interest rate forecasts 10y 10y Sw eden 3m libor USA 3m libor sw ap sw ap 3.00 3.00 3.25 Oct-13 Jan-14 Jul-14 1.25 1.25 1.25 2.25 2.25 2.50 Oct-13 Jan-14 Jul-14 0.30 0.35 0.35

Last Germany Prior 92.80 10y 98.50 2.59 10y yld 1.67 3.66 - US spread -0.89 10y sw ap 2.25 2.25 2.50 3m euribor 0.20 0.25 0.20

Germany Oct-13 Jan-14 Jul-14

JPYNOK(rha)

SEKNOK & CHFNOK

91
89

6.4
6.2

87 02-Jul
SEKNOK

16-Jul

6.0 30-Jul
CHFNOK (rha)

Equities
15700 15200 14700 14200 13700 02-Jul 16-Jul
Dow Jones

510 500 490 480 470 460 450 30-Jul

NOK sov. NST21 NST22 NST23 NST471 NST472 NST475 NST475 NST475 NOK FRA SEP DEC MAR JUN

Miscellaneous Prior Last Change Maturity year rem. NOK-index TWI Prior 1.60 1.61 1 18.12.2013 0.39 Last 95.75 95.44 1.46 1.41 -6 19.03.2014 0.64 Oil price: (Ldn,cl) 1m 1.52 1.52 0 18.06.2014 0.88 SPOT 107.91 107.32 1.45 1.45 0 15.05.2015 1.79 Gold price 29.07.2013 PM 1.73 1.75 1 19.05.2017 3.81 AM: 1331.0 1329.8 2.64 2.66 1 24.05.2023 9.82 Equities Today 0700 % last 2.64 2.66 1 24.05.2023 9.82 Dow Jones 15521.97 -0.2% 2.66 2.67 1 24.05.2023 9.82 Nasdaq C. 3599.14 -0.4% 3 mnd 6 mnd NOK NIDR NIBOR FTSE100 6560.25 0.1% 1.71 1.80 1m 1.75 1.65 Eurostoxx50 2741.73 0.0% 1.71 1.81 3m 1.82 1.72 DAX 8259.03 0.2% 1.72 1.86 6m 1.87 1.78 Nikkei 225 13869.82 1.5% 1.76 1.91 12m 2.00 1.91 OSEBX 494.25 0.0% Sources to all tables and graphics: Thomson Reuters, Thomson Datastream and DNB Markets