Major economies

Week ahead: Central bank intervention looming?

18 May 2012 | Jan von Gerich

All eyes remain on anecdotal news on how depositors in Greece and outside the country are reacting to the recent events. In terms of economic data releases, the main focus will be on flash PMIs for May.

The €nd?

16 May 2012 | Anders Svendsen

New elections have been called in Greece and so we look at the timeline of what might happen in the coming months and the consequences if a solution to Greece's problems is not found.

Is Bernanke already a lame duck?

16 May 2012 | Johnny Bo Jakobsen

Fed chairman Bernanke may effectively already be a lame duck as he is likely to step down in early 2014 and his dovish views appear to be increasingly isolated within the organisation. This could be a huge issue going forward.

ECB intervention looming

16 May 2012 | Jan von Gerich

With market strains increasing rapidly, the ECB remains the one with the capacity to react fast. After the ECB has acted first to try to bring some calmness to markets, something could happen on the government front as well.

No growth in the Euro area in Q1

15 May 2012 | Anders Svendsen

Today's key figure relases showed a somewhat better growth performance for the Euro area as a whole than expected.

New financial forecasts from Nordea – Continued choppy waters

14 May 2012 | Steen Grøndahl

Greek elections and contagion risks still the major story. We are keeping our forecasts basically unchanged.

Week Ahead: Most focus still on politics while economic data to weaken

11 May 2012 | Jan von Gerich

The Greek situation will continue to grab the headlines. Euro-zone Q1 GDP will likely confirm the zone has fallen into another recession, while US April retail sales growth likely weakened notably compared to March.

Signs of a higher NAIRU ignored by the Fed, for now

11 May 2012 | Johnny Bo Jakobsen

Probably the most important debate on US monetary policy is whether there really is an aggregate demand shortfall, and as a result, a negative output gap. If the answer is yes, then the Fed should continue supporting the economy. If the answer is no, monetary policy should soon be tightened.

New hope in Greek coalition talks

11 May 2012 | Anders Svendsen

News that the Democratic Left have tentatively agreed to participate in a grand coalition offers hope of a new Greek government being announced this weekend.

Euro-zone austerity strategy rethought

11 May 2012 | Jan von Gerich

According to the Financial Times, Spain could be offered an extra year to hit the 3% of GDP deficit target. This is likely a step in the process, where the strategy of front-loaded austerity measures is rethought and economic growth given a higher priority.

Euro-zone debt worries continuing to push German yields to new lows

10 May 2012 | Jan von Gerich

With German bonds enjoying strong momentum, yields could fall even further. The pricing of a risk of some sort of a Euro-zone break-up will likely increase on the back of the Greek situation, while the Spanish situation continues to be another source of uncertainty.

Greek political uncertainty

7 May 2012 | Anders Svendsen

With 99% of the votes from Sunday’s general elections counted, the two “big” parties – the conservative New Democracy and the socialist PASOK – won 149 seats in the 300-seat parliament and hence lack two seats to form a majority coalition.

Hollande President, Greek coalition fails to win majority

7 May 2012 | Anders Svendsen

Markets are expected to set out with a negative tone towards risk today after the uncertain Greek election outcome and the very soft US employment report Friday. Hollande won in France, as expected.

Weak US jobs report, but not bad enough to force the Fed's hand

4 May 2012 | Johnny Bo Jakobsen

While the soft April employment numbers leave the door open for further monetary easing, the report isn’t bad enough to force the Fed to announce QE3 at the 19-20 June FOMC meeting.

NEMO: Europe heats up over the Summer

3 May 2012 | Steen Grøndahl

Our latest take on Nordic and Global financial markets and economies.

Not much new from the ECB

3 May 2012 | Anders Svendsen

The ECB decided to keep interest rates unchanged at today's meeting and gave no new signals.

Lots of news to digest next week

3 May 2012 | Anders Svendsen

Outlook for next week's key figures and events in the US, the euro area, China, Japan, UK, Canada, Switzerland, Australia and New Zealand.

The US: one swallow doesn’t make a summer

3 May 2012 | Johnny Bo Jakobsen

While QE3 is still expected to be announced in June, too little Fed tightening is priced in longer out.

Draghi to strike a mildly dovish tone today

3 May 2012 | Anders Svendsen

Additional crisis measures are not on the cards at the ECB meeting today – but we see an increasing risk of an additional rate cut if the expected recovery of the Euro area fails to materialise.

Concerns about Italian growth

2 May 2012 | Anders Svendsen

Today’s PMI numbers increase the concerns about growth in Italy and confirms the gradually worsening growth momentum in the Euro area in total

Strong ISM survey makes QE3 less likely

1 May 2012 | Johnny Bo Jakobsen

Following recent evidence of slower US growth, the April ISM manufacturing survey was a pleasant surprise.

Italian and Spanish yields jumping despite buying from domestic banks

30 Apr 2012 | Jan von Gerich

Italian and Spanish bond yields rose notably in March despite continued support from domestic banks. This does not bode well for the future, as the pace of purchases by banks is not at least set to increase.

No time to be complacent - US growth slows

27 Apr 2012 | Johnny Bo Jakobsen

At 2.2% US GDP growth was probably only slightly weaker than the Fed’s expectations for Q1. However, I believe the Fed’s growth forecast will be challenged more in Q2.

Correction due, but next week’s data to feed the bond rally

27 Apr 2012 | Jan von Gerich

Bond markets appear due for a correction, but we expect next week’s events and economic data only to add to the gloomy sentiment.

Credit ratings back in the spotlight

27 Apr 2012 | Jan von Gerich

Yesterday’s move by Standard & Poor’s to downgrade Spain’s rating by two notches brought rating news back to the spotlight. More downgrades are likely in store, as austerity measures bite amidst an uncertain economic outlook.

Fed: QE3 is still on the table

25 Apr 2012 | Johnny Bo Jakobsen

Federal Reserve chairman Bernanke said Wednesday that further bond purchases by the Fed remain “very much on the table”, if the economy needs further support. But it will require weak economic data for QE3 to be announced in June. And this is what I still expect to see.

ECB's lending survey adds to growth concerns

25 Apr 2012 | Anders Svendsen

The need for additional crisis measures from the ECB has diminished, but interest rate cuts have become more likely!

Risk-off as the Fed says no to QE3?

24 Apr 2012 | Johnny Bo Jakobsen

At this week’s two-day FOMC meeting that concludes on Wednesday, the Fed will signal no change in the current policy stance. The Fed’s no to QE3 risks triggering a further sell-off in risky assets and a stronger USD.

To QE or not to QE

24 Apr 2012 | Anders Svendsen

The big central banks have turned out to be much less inclined to QE than expected. We no longer expect QE from the Bank of England in May.

The fall of the Dutch government another setback for the Euro zone

23 Apr 2012 | Jan von Gerich

The fall of the Dutch government illustrates how hard introducing austerity measures is in the core countries as well. If even the core countries show reluctance to meet the budget limits set by the EU, bringing back confidence towards the currency union and its rules is certainly not going to succeed.

The Fed to offer little ammo to bond bulls

20 Apr 2012 | Jan von Gerich

Next week’s calendar looks quite interesting, with the main focus in the US on the 2-day Fed meeting concluding on Wednesday.

New French President may be less focused on budget discipline

19 Apr 2012 | Anders Svendsen

Presidential elections due on 22 April and 6 May. Conservative Sarkozy and Socialist Hollande are neck to neck for the first round, while Hollande looks like a winner for the run-off.

Successful Spanish bond auctions not taking away the pressure

19 Apr 2012 | Jan von Gerich

Today’s Spanish bond auctions received, again, more attention than probably warranted as the results do not really tell us that much new about the underlying demand.

Spanish house price data only adding to worries about the country

18 Apr 2012 | Jan von Gerich

Fresh data showed Spanish house prices falling by 2.9% q/q in the first quarter of the year. Until the housing market stabilizes, uncertainty is likely to prevail.

The firewall never going to be big enough to work on its own

18 Apr 2012 | Jan von Gerich

The G20 finance ministers will likely agree on increasing the resources of the IMF later this week. Such a decision, though not insignificant, is unlikely to change the course for markets.

Spanish T-bill results not a reason for big cheer

17 Apr 2012 | Jan von Gerich

The significance of today's successful Spanish T-bill sale should not be overplayed. The auction size was rather modest, though Spain did pay less for its 1-year funding compared to Italy last week. Thursday’s bond auctions will be more interesting.

Minor changes to financial forecasts

16 Apr 2012 | Anders Svendsen

We see rates continuing lower in the coming months and the EUR/USD unchanged around the current levels.

Spanish banks well-prepared for upcoming redemptions

16 Apr 2012 | Jan von Gerich

Most news stories only report the jump in overall central bank borrowing by Spanish banks in March, but miss the increase in funds Spanish banks have in reserve to meet future funding needs. The funding position of Spanish banks – like that of the Spanish sovereign – is actually relatively good at the moment.

Fed View: QE3 is still on the table, despite no signals from the Fed

13 Apr 2012 | Johnny Bo Jakobsen

Although Fed officials continue to signal no imminent QE, I still expect QE3 to be announced in June.

A lot on the calendar next week, but positive surprises still scarce

13 Apr 2012 | Jan von Gerich

We do not expect next week’s economic data offerings to convey a particularly encouraging message. Here is what we expect from the week ahead.

US economy: Debt ceiling looms again – Congress has a full plate

12 Apr 2012 | Johnny Bo Jakobsen

The US government might be bumping up against the debt ceiling already by end-September, at the height of the presidential election campaign and significantly earlier than many analysts seem to expect.

Italian T-bill yields jump but alarm bells not ringing particularly loud yet

11 Apr 2012 | Jan von Gerich

Even though the recent rise in Italian yields is worrying, the threat of an immediate funding crisis remains limited. Still, the pressure on Italian bonds is likely to continue in the near future.

Liquidity boosting the safest assets again

10 Apr 2012 | Jan von Gerich

The huge liquidity sloshing around is boosting the safest asset classes again, while Spanish and Italian bonds remain under pressure. This is likely to continue, until we see some better economic data again.

Bonds in demand ahead of the long weekend

5 Apr 2012 | Jan von Gerich

Notable flight-to-safety demand has taken place today ahead of the Easter holidays. Even though the drivers are real, one should not over interpret the moves seen on thin markets ahead of a long weekend, with also tomorrow's US employment report creating uncertainty.

Draghi finds discussions about exit strategy premature

4 Apr 2012 | Anders Matzen

Steady as he goes was the keyword for the ECB meeting today. All interest rates were left unchanged and the ECB did not announce any new liquidity operations.

Fed minutes play down the chances of further QE

4 Apr 2012 | Jan von Gerich

Yesterday's Fed minutes sent a signal that the central bank is not tilted towards more quantitative easing any more. Such a message opens more room for espcially longer US Treasury yields to rise from current levels.

Spanish bond yields to continue to rise

4 Apr 2012 | Jan von Gerich

Today’s Spanish auction results further illustrate that the support from the ECB’s 3-year refinancing operations is waning. Spanish yields will likely continue to lurch higher, leading to higher uncertainty about the Euro-zone situation again.

Differences in collateral rules increasing Euro-zone worries

3 Apr 2012 | Jan von Gerich

The differing collateral policies implemented by national Euro-zone central banks put banks in various parts of the Euro-zone in different positions. Such policies increase worries about the cohesion of the Euro zone.

Risk-reward favours 2-5-year flatteners

2 Apr 2012 | Jan von Gerich

The huge amount of excess liquidity in the Euro-zone banking system is still favouring a flatter curve, carry is positive for flatteners, while the curve tends to flatten, when short rates start to rise. The 2-5-year curve should still have flattening potential left.

The Eurogroup agrees to increase firewall to EUR 700 bn

30 Mar 2012 | Anders Matzen

Earlier today the Eurogroup announced that the total size of the Euro area's firewall will be raised from EUR 500 bn to EUR 700 bn. This is a welcome move - which should have a positive effect on markets as well - if they can be bothered to care now that the ECB has doped everyone with the two 3-year LTRO's.

The new Spanish government plays a dangerous game with its 2012 budget

30 Mar 2012 | Anders Matzen

Spanish yield spreads are rising ahead of the Spanish government’s presentation of a supplementary budget for 2012. We think the government can pull out of the crisis if the it keeps the momentum behind structural reforms and consolidation.

Spain and Italy still deep in the woods – German bonds to remain supported for now

29 Mar 2012 | Jan von Gerich

Spanish and Italian bond yields are likely to continue to creep higher, as the support from domestic bank buying fades. Such market action will likely increase general worries about the course of the debt crisis, keeping German bonds well-supported.

Italian and Spanish banks continue government bond buying spree in February

28 Mar 2012 | Anders Matzen

Fresh data from the ECB show that Italian and Spanish banks continued to purchase solid amounts of government securities in February. No doubt the ECB’s 3-year LTRO is the main reason behind this move – driving Italian and Spanish yields lower.

ECB bond purchases only a shadow of their former self

27 Mar 2012 | Jan von Gerich

The ECB's bond purchases have been very modest recently. Arguably, bigger purchases would not even have been necessary lately. However, the Securities Markets Programme of the ECB has become more of a blunt weapon also in general, and has less potential to fight the debt crisis, if the need arises again.

Global Economy: Times are changing - for a while

23 Mar 2012 | Johnny Bo Jakobsen

The batch of good economic news seems to have run its course, suggesting financial markets might be at a new turning point.

Disappointing Euro PMI’s send yield spreads wider

22 Mar 2012 | Anders Matzen

The decline in composite PMI was driven by a 1.3 index point fall in manufacturing PMI to 47.7 in March.

US yields with more upside potential than EUR ones

20 Mar 2012 | Jan von Gerich

The recent sell-off in bonds has shown little signs of abating. One only needs to look back to the past couple of years to see that yields can see a substantial jump without major changes in central bank policy.

EFSF funding costs close to Belgium

19 Mar 2012 | Jan von Gerich

The main Euro-zone bailout fund launched a new 20-year benchmark at a cost closer to Belgium than France. Such funding levels do not exactly illustrate high confidence in the facility, while the high funding needs of the EFSF will put pressure on its funding costs to increase further going forward.

Italian yields below Spain again – are markets crazy?

15 Mar 2012 | Jan von Gerich

Despite its high debt, the Italian situation actually looks much better compared to Spain on many measures.

The Euro area: The ECB has done its part - now it's up to politicians to solve the debt crisis

8 Mar 2012 | Anders Matzen

The ECB kept all interest rates unchanged at todays meeting. At the same time Draghi used the press conference to signal stable rates ahead, while further 3-year LTRO’s are off the table.

Euro area update: Target 2 imbalances worries the Bundesbank

5 Mar 2012 | Anders Matzen

After the record breaking allotment of EUR 523 bn in the ECBs second 3-year Long Term Refinancing Operation, attention has once again turned to the build-up of Target 2 balances.

Central Bank Watch: Another rush of liquidity to Euro area banks

29 Feb 2012 | Anders Matzen

The scene is set for further “risk on” after the ECBs second 3-year Long Term Refinancing Operation (LTRO) resulted in allotments of EUR 529.5 bn.

Markets too complacent

28 Feb 2012 | Anders Matzen

Considering the macro risks hanging over the global economy, we argue that markets may be too complacent. We see four downside risks that could materialise this year, undermining global growth and eventually negatively affecting investor confidence and market valuations of risky assets.

Spanish and Italian banks went on a bond binge in January

28 Feb 2012 | Anders Matzen

Ahead of the ECBs next 3-year LTRO it is interesting to note that the first 3-year LTRO from December prompted Italian and Spanish banks to go on a bond purchasing spree in January.

Chief Economist’s Corner - Fuel for the crisis

27 Feb 2012 | Helge J. Pedersen

Hardly has the dust settled on the endgame for Greece than new threats to global economic growth emerge on the horizon.

Also Spain funding itself with rock-bottom rates

23 Feb 2012 | Jan von Gerich

Spain saw its T-bill yields plunge in an auction earlier this week. 3-month bills were sold at an average yield of 0.40%, whereas still in November the corresponding yield was 5.22%.

The ECB’s second 3-year operation likely to disappoint

23 Feb 2012 | Jan von Gerich

The ECB will release the results from its second 3-year operation next week and expectations have been set high that another huge liquidity injection would boost markets again.

A Greek haircut could go all the way

31 Jan 2012 | Anders Matzen

Greece seems to be very close to a deal on a voluntary debt rescheduling, which could be announced later this week.

EU summit is mostly work in progress

31 Jan 2012 | Anders Matzen

Three topics are worth mentioning about the EU summit Monday

Chief Economist’s Corner - Nordics “best in class”

30 Jan 2012 | Helge J. Pedersen

Nordic countries are among the few still qualifying for top ratings. However, this has not always been the case, and the Nordics will not retain their high ratings unless their public finances continue to outperform German public finances.

Euro PMI's point to stable ECB rates

24 Jan 2012 | Anders Matzen

Euro area PMI's surprised on the upside - driven by Germany.

Euro sovereign downgrades - a crisis accelerator

16 Jan 2012 | Niels From

France and Austria’s top AAA ratings fell victim of the sovereign debt crisis Friday night, when S&P downgraded nine of 16 Euro countries.

Chief Economist’s Corner - Monty Python had a point

12 Jan 2012 | Helge J. Pedersen

Michael Palin once said in a famous Monty Python sketch: "And you try and tell the young people of today that ..... they won’t believe you." And at the risk of sounding old-fashioned, I’m actually not in doubt that the crisis in the late 1980s and the early 1990s was much worse for the average person than the current crisis. Though I do understand if young people today won’t believe me.

US labour market - As good as it gets

6 Jan 2012 | Anders Matzen

Today's fresh data from the US labour market in December certainly shows an economy that has picked up steam in the second half of 2011.

Euro area turnaround on the way?

5 Jan 2012 | Anders Matzen

Making a case for why an improvement could be lurking beneath the fog of doom and gloom.

US payroll tax hike looming

21 Dec 2011 | Anders Matzen

A US payroll tax hike is looming but the markets seem to be ignoring this major risk of recession.

Chief Economist’s Corner - 2012, a year of challenges

21 Dec 2011 | Helge J. Pedersen

It is safe to conclude that 2011 was a year of unforeseen events that had a significant impact on the global economy.

German economy offers a candle of hope

20 Dec 2011 | Anders Matzen

German key figures are surprisingly on the upside.

FX themes in 2012 - Market Drivers and Effects

19 Dec 2011 | Niels From

Our FX strategists have reviewed this years events and selected 9 themes that will drive the markets in 2012.

Economic Outlook Denmark - A year of challenges

19 Dec 2011 | Helge J. Pedersen

Since summer the European debt crisis has made its clear mark on the Danish economy.

Outlook 2012 - kill or cure

9 Dec 2011 | Niels From

Another year is over – a new year is beginning, and kill or cure will be the theme for 2012.

Chief Economist's Corner - Who will foot the bill now?

21 Nov 2011 | Helge J. Pedersen

Just like the Jasmine revolution has overthrown regime after regime in the Arab world, the sovereign debt crisis is weeding out in European politics.

Italy - where Europe meets its Waterloo?

11 Nov 2011 | Anders Matzen

Nordea's Chief Analyst on the euro area presents his view on the latest developments in the European debt crisis.

Euro area inflation stays high - unemployment points to ECB rate cut

31 Oct 2011 | Anders Matzen

Euro area inflation suprised on the upside in October, but we still think that most of the economic key figures are pointing towards an ECB rate cut in December. Not least the Euro area unemployment data for September, released today.

EU summit conclusions - A sufficient result for markets

27 Oct 2011 | Anders Matzen

After much nail biting European leaders finally succeeded: The series of summits among EU countries led to a comprehensive agreement on how the debt crisis can be contained, and a new financial crisis can be avoided.

Euro area PMI's support the case for ECB rate cuts

24 Oct 2011 | Anders Matzen

Flash PMIs for the Euro area support our expectation of a 25bp cut in the ECB’s refi-rate before the end of the year.

Breaking up is hard to do - and still unlikely in the Euro area

12 Sep 2011 | Niels From

The Euro area debt crisis roils financial markets once again. Is a break up of the Euro area imminent or is the stand-off between Greece and Germany just another thorny step on the road? We take a look at consequences for financial markets.

Economic Outlook: Signs of crisis

31 Aug 2011

Leading economic indicators suggest that the world economy is facing a very uncertain period.

US debt deal -- Has disaster been avoided?

2 Aug 2011 | Anders Matzen

In this video presentation, Nordea's Chief Analyst for the US, Johnny Bo Jakobsen, and Chief Analyst for the Euro zone, Anders Matzen, discuss the new US debt deal and the consequences of a downgrade of US government debt.

Allocation Update: Careful as growth worries are testing

13 Jun 2011 | Roger Wessman

Slowing growth is increasingly putting downward pressure on asset prices and bond yields.

Allocation Update: Inflation fears recede temporarily

11 May 2011 | Roger Wessman

Inflation and rate hike fears have backed down in the past month, but with the economy continuing on the recovery track we think the retracement is just temporary.

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