Editor: Felix Ewert

The Week Ahead Key Events 11 – 17 Sep, 2017

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Key Economic Indicators & Events: 11 – 17 Sep, 2017 FRIDAY 8 SEP 2017

Date CET Country Event Period SEB forecast* Consensus* Last* Mon 11 Gov. auctions: US to sell 3y notes (19.00). Speeches: ECB’s Coeure (09.00). Other: Norwegian General Election (09.00). 01.50 JAP Money stock M3 yoy Aug 3.4 3.4 08.00 JAP Machine tool orders yoy Aug, f --- 28.0% 08.00 NOR CPI | CPI-ATE Aug -0.5/1.6 | -0.5/1.3 -0.3/1.7 | -0.3/1.4 0.3/1.5 | 0.3/1.2 08.00 NOR PPI including oil Aug --- -1.0/1.8 08.00 SWE Reg. unemployment rate Aug 4.1 4.0 4.0 08.30 SWE SEB releases housing price indicator 58.0 09.00 DEN CPI | EU harmonized Aug -0.4/1.4 | ---/--- -0.5/1.3 | ---/--- 0.8/1.5 | 1.0/1.5 Tue 12 Gov. auctions: Germany to sell 29y bonds (11.30), US to sell 10y notes (19.00). Speeches: ECB’s Constancio (15.45). Other: Opening of the

Swedish Riksdag, Swedish PM Löfven read Statement of Government policy (14.00). 09.30 SWE CPI | CPIF Aug -0.3/2.0 | -0.3/2.1 -0.1/2.2 | -0.1/2.3 0.5/2.2 | 0.6/2.4 10.00 NOR Regional network report past 3m | next 6m Aug ---/--- 1.11/1.29 10.30 UK CPI | core yoy | RPI Aug 0.4/2.7|2.5|0.5/3.7 0.5/2.8 | 2.5 | 0.6/3.7 -0.1/2.6 | 2.4 | 0.2/3.6 10.30 UK House price index yoy Jul 4.8 4.9 12.00 US NFIB small business optimism Aug 105.0 105.2 Wed 13 Gov. auctions: Germany 10y bonds (11.30), UK 10y bonds (11.30). Speeches: EU President Juncker State of the Union speech (09.00), Riksbank’s

deputy governor Ohlsson on current monetary policy and economic situation (16.30). Other: SEB publishes Currency Strategy (12.00) 08.00 SWE Prospera inflation expectations 1y | 2y | 5y Aug 1.8 | 2.0 | 2.1 1.7 | 2.0 | 2.1 08.00 GER CPI | EU harmonized Aug, f 0.1/1.8 | 0.2/1.8 0.1/1.8 | 0.2/1.8 09.00 EMU Employment qoq/yoy Q2 --- 0.4/1.5 09.30 SWE GDP qoq/yoy Q2, f 1.3/3.6 1.7/4.0 1.7/4.0 10.30 UK Jobless claims Aug --- -4.2k 10.30 UK ILO unemployment rate | employ. chg 3m/3m Jul 4.4 | 155k 4.4 | 125k 10.30 UK Avg. weekly earnings 3m/y | ex. bonus 3m/y Jul -- | 2.2 2.3 | 2.2 2.1 |2.1 11.00 EMU Industrial production Jul 0.1/--- 0.0/3.3 -0.6/2.6 14.30 US PPI | ex food & energy Aug 0.3/2.5 | 0.2/2.1 -0.1/1.9 | -0.1/1.8 16.30 US DOE crude oil inventories Sep 8 --- 4580k 20.00 US Monthly budget statement Aug USD -124.0bn USD -42.9bn Thu 14 Gov. auctions: Riksbank to buy SGB 1047 & 1058 (09.00-10.00), Sweden to sell SGB IL 3113 & 3112 (11.00). Speeches: RBA’s Debelle in Sydney

(01.15), Riksbank’s deputy governor Jansson on current monetary policy and economic situation (09.05). Bundesbank’s Weidmann (17.30), ECB’s Mersch (18.00). Reports: Oracle (22.00).

01.01 UK RICS house price balance Aug -1% 1% 04.00 CHI Industrial production yoy Aug 6.6 6.4 04.00 CHI Retail sales yoy Aug 10.5 10.4 06.00 SWE House prices (Mäklarstatistik), mom Aug 0% 06.30 JAP Industrial production Jul, f --- -0.8/4.7 08.00 FIN CPI Aug --- -0.3/0.5 09.30 SWI SNB rate decision Sep 14 -0.75 -0.75 09.30 SWE Unemployment rate (LFS) | seas. adjusted Aug 6.2/6.7 6.4 | 6.8 6.6 | 7.1 13.00 UK BOE rate decision | APF target Sep 14 0.25 | GBP 435bn 0.25 | GBP 435bn 0.25 | GBP 435bn 14.30 US Initial jobless claims Sep 9 300k 298k 14.30 US CPI | ex. food and energy Aug 0.3/1.9 | 0.2/1.6 0.3/1.8 | 0.2/1.6 0.1/1.7 | 0.1/1.7 Fri 15 Gov. auctions: Riksbank to buy SGB IL 3110 & 3109 (09.00-10.00). Speeches: ECB’s Nouy in Finland (08.00). 08.00 NOR Trade balance Aug --- NOK 14.3bn 11.00 EMU Trade balance SA | NSA Jul EUR 20.0 | --- EUR 24.0bn | --- EUR 22.3bn | 26.6bn 14.30 US Retail sales, advanced | ex auto & gas mom Aug -0.1 | 0.4 0.1 | 0.3 0.6 | 0.5 15.15 US Industrial prod. | manufact. prod. | cap. util. Aug 0.0 | 0.2 | 76.7 0.1 | 0.5 | 76.8 0.2 | -0.1 | 76.7 16.00 US Michigan sentiment Sep, p 96.0 96.1 96.8

* % MoM/YoY unless otherwise stated. Felix Ewert, felix.ewert@seb.se

Monday 11, 08.00

NOR: CPI (Aug) % mom/yoy SEB Cons.

Norges Bank

Prev.

Headline -0.5/1.6 -0.3/1.7 --- 0.3/1.5

CPI-ATE -0.5/1.3 -0.3/1.4 1.1 0.3/1.2

CPI-ATE has dropped considerably from the peak in July last year and strong comparison months. Base effects will turn weak starting in August and we predict inflation on imported goods to stabilize going forward.

Slightly higher inflation on food and services means that CPI-ATE inflation is estimated to edge slightly higher during the second half of the year.

Muted international prices and low wage increases imply that the inflation rate will remain below target until the end of 2019.

Monday 11, 08.00

SWE: Unemployment, registered (Aug) % mom/yoy SEB Cons. Prev.

Open 4.1 4.0 4.0

Open, seas. adj. 3.9 --- 4.0

Total seas. adj. 7.5 --- 7.6

• Registered unemployment (incl. labour market measures) has moved sideways since the middle of last year and even slightly higher, but is now showing some sings of starting to edge lower again. Weekly statistics imply this trend continued in August.

• Unemployment according to the more important Labour Force Survey (LFS) seems to be trending lower, although it increased markedly in July. We think this is due to variations in the seasonal pattern and predict the downward trend to be resumed..

• Employment indicators have been very strong during the summer with employment plans in the business sector increasing close to record highs during the summer.

Monday 11, 09.00

DEN: CPI (Aug) % mom/yoy SEB Cons. Prev.

CPI -0.4/1.4 -0.5/1.3 0.8/1.5

• Parts of the major upside surprise to CPI in July was caused by travels and is expected to be reversed already in August.

• Food prices, which also contributed strongly to CPI in July, are expected to reverse only a small part of the upturn.

• Parts of the upturn in the core inflation rate in July is explained by base effects from low prices last year, but there were also relatively large price increases this year. To what extent this will turn out to be a more permanent uptick in the inflation rate is uncertain. Continued very muted wage pressures and downward pressure from a stronger exchange rate imply that the inflation rate will continue to be low going forward.

Tuesday 12, 09.30

SWE: CPI (Aug) % mom/yoy SEB Cons. Riksbank Prev.

Headline -0.3/2.0 -0.1/2.2 -0.2/2.1 0.5/2.2

CPIF -0.3/2.1 -0.1/2.3 -0.2/2.2 0.6/2.4

CPIF ex. energy 1.8 --- 2.0 2.1

• The inflation rate is predicted to fall back in August driven by a reversal of the large price hikes on package holidays earlier during the summer. International travels are predicted to lower CPI by 0.7%-points this month..

• CPIF ex energy and international travels was .1.7% y/y in July.

• Still, other prices have also been higher, most notably on services and we predict service inflation could accelerate further during the autumn.

• Also, prices on foods are predicted to accelerate, partly due to higher international prices and earlier krona weakness. Also, prices on other goods are predicted to rise further in the near term driven by the exchange rate.

• Still, CPIF inflation is predicted to fall below target again towards the end of the year. Our CPIF forecasts for the next 6 months are in line with the Riksbank´s. Our forecast for CPIF ex energy is, however, lower in August and September.

Tuesday 12, 10.00

NOR: Norges Bank’s Regional network report Aggregated output, index SEB Cons. Prev.

Past 3 months ---- ---- 1.11

Next 6 months ---- ---- 1.29

Norges Bank’s regional network report will be important input ahead of the September 21key rate decision and the upcoming Monetary Policy Report.

The previous report indicated a further acceleration for growth momentum ahead. Hard data confirmed these signals, with mainland GDP rising 0.7% in Q2.

In June, most sectors expected to increase output in the coming 6 months, with non-oil exports & manufacturing as well as household services being the exemption. Moreover, expectations relative to the March report were lifted significantly among contacts from the oil service industry.

We expect contacts within non-oil sectors to lift their output expectations ahead, supported by strong external demand and rising export orders. Meanwhile, the outlook within construction is likely to moderate.

Norges Bank forecasts mainland GDP growth of 2.0% in 2017 and 1.9% in 2018. A further improvement in the aggregated output indicator suggest would point to upside risk Norges Bank ‘s 2018 estimate.

Tuesday 12, 10.30

UK: CPI (Aug) % mom/yoy SEB Cons. Prev.

Headline 0.4/2.7 0.5/2.8 -0.1/2.6

Core 2.5 2.5 2.4

RPI 0.5/3.7 0.6/3.7 0.2/3.6

• Core inflation has trended higher during 2017 driven by higher goods prices, which are rising on the back of a weaker sterling. In June goods prices showed signs of levelling out and we predict the acceleration in goods inflation to slow in the second half of this year.

• The renewed Sterling weakness over the last 2 months is an upside risk to the near term forecast.

• Petrol prices will exert upward pressure on headline inflation in August and even more so in September. Temporary higher prices on petrol due to hurricane Harvey will help lift the inflation rate to 3% y/y in September.

Wednesday 13, 08.00

SWE: Prospera inflation expectations (Aug) All (Money market) SEB Prev.

1y 1.8 (1.9) 1,7 (1.8)

2y 2.0 (2.0) 2.0 (2.0)

5y 2.1 (2.1) 2.1 (2.1)

• September is the broader survey including also labour market parties and purchasing managers.

• BEI inflation rates have been largely stable on longer horizons, but have increased over the last 3 months on the 2 years horizon.

• We predict short-term expectations to continue to edge higher, but predict stable expectations on the 2y and 5y horizons.

Wednesday 13, 09.30

SWE: GDP, final (Q2) %, qoq/yoy SEB Cons. Prev.

GDP 1.3/3.6 1.7/4.0 1.7/4.0

• The extremely strong Q2 growth according to the flash estimate (1.7%, 4.0% y/y) is predicted to be revised lower. Several of the underlying indicators have been revised lower on both the production and expenditure side (e.g. household consumption and business sector production).

• Also, inventories according to the sector statistics look lower than what was assumed in the flash estimate.

• Net exports of goods have been revised slightly higher. Also, SCB will have better data on net service trade and for the public sector, which both were surprisingly weak according to the flash estimate.

• SCB will also present revised benchmark calculations for 2015 => larger scope than normal for revision to historical GDP.

• Our forecast for average 2017 GDP (3.2%) incorporates a possible downward revision of Q2 (by assuming a setback for growth in Q3).

Wednesday 13, 10.30

UK: Unemployment/Employment (Jul) Cons. Prev.

ILO Unempl. rate 4.4% 4.4%

Employment change (3m/3m) 155k 125k

Unemployment: Employment growth has improved in recent months lowering the unemployment rate to 4.5%, which is the lowest since the beginning of the 70’s.

Job creation. Employment growth started to improve in March after being weak in the beginning of the year. Employment continued to improve more than anticipated in June after strong growth in May.

The employment component according to the composite PMI improved in July, which suggest that employment growth picked up.

However, correlation between employment according to surveys and actual employment growth have been weak.

Wednesday 13, 10.30

UK: Average weekly earnings (Jul) SEB Cons. Prev.

Average weekly earnings 3M/YoY --- 2.3 2.1

Weekly earnings (ex bonuses, 3M/YoY) 2.2 2.2 2.1

Although the 3m/yoy wage growth improved in June the annual wage growth in June alone fell back to 1.9% from almost 2.4% in May.

Despite low unemployment, which historically has supported stronger wage growth, wages continue to rise very modestly.

It appears the improvement in May was perhaps just temporary and that wage growth doesn’t react to tighter conditions in the labour market.

The BOE has suggested that one reason for weak wage growth could be subdued productivity growth and productivity has not improved lately.

Moreover, low wage growth could be related to uncertainty from the Brexit process.

Wednesday 13, 11.00

EMU: Industrial production (Jul) % SEB Cons. Prev

SA m/m 0.1 0.0 -0.6

WDA y/y --- 3.3 2.6

Indicators continue to paint a bright picture of growth in EMU-countries and companies are happy with their order books. Manufacturing PMI has for the last moths been at a relatively stable level, not far from earlier cyclical highs.

Data for individual countries have been mixed but still point at a heathy increase in production.

Already published data for individual countries has surprised somewhat on the downside: Ger: 0.0/4.0%, Fr: 0.5/3.7%, Sp: -0.3/1.9%

Thursday 14, 09.30

SWE: Unemployment (Aug) % SEB Cons. Prev.

Seas. adj. 6.7 6.8 7.1

Actual 6.2 6.4 6.6

Employment 1000s/% yoy

130/2.7 --- 104/2.1

• The spike in the unemployment rate in July was a major surprise given that employment indicators have improved significantly during the summer.

• Higher labour force participation explains parts of the higher unemployment in July, but also employment was significantly weaker than expected.

• We think the upturn in unemployment is temporary and expect the gradual downward trend from the last 2 years be resumed.

• Monthly unemployment numbers are highly volatile which makes the underlying trend difficult to assess.

Thursday 14, 13.00

UK: BOE rate decision & minutes SEB Cons. Prev.

Policy rate 0.25% 0.25% 0.25%

APF-target (GBP) 435bn 435bn 435bn

Last meeting: In August the Bank of England Monetary Policy Committee (MPC) voted (6-2) to maintain the Bank Rate at 0.25%, the APF at £435bn and corporate bond purchases at £10bn. Two members (McCafferty and Saunders) argued for an immediate 25 bps rate hike as slack in the labour market would be absorbed faster than in the central projection.The majority, however, as they were more worried for the slowdown in household consumption and that GDP growth had been sluggish. Moreover there were concerns that increased domestic uncertainty would act as a drag on investments..

Outlook for growth & inflation: The inflation (CPI) forecast was almost unchanged in August from the May report indicating that CPI will peak just below 3% at the end of this year before slowly moving lower. Inflation is expected to remain above the 2% target for the whole forecast period. The BOE revised the growth forecast lower compared to the May forecast. GDP growth is now expected to fall further in coming quarters before recovering towards 1.8% y/y by the end of next year

Market expectations: All analysts expect the BOE leave policy unchanged at the Sep. 14 meeting. (Bloomberg).

Expected decision: The BOE left monetary policy unchanged at the last meeting in August. With one of the hawks now replaced the support for rate hikes in the MPC has decreased. With growth at 0.3% q/q in Q2 we doubt that further members will changed their minds. Clearly inflation will stay above the BOE target. However, the upward pressure on consumer prices is mostly the effect of the substantial depreciation of the GBP since late 2015. This is not enough to trigger a policy response at this point. Policy will be left unchanged at this meeting.

Thursday 14, 14.30

US: CPI (Aug) % mom/yoy SEB Cons. Prev.

Headline 0.3/1.9 0.3/1.8 0.1/1.7

Core 0.2/1.6 0.2/1.6 0.1/1.7

• Headline inflation is expected to rise in August and continue markedly higher in September. The driving force is markedly higher petrol prices, driven by refinery problems in the wake of hurricane Harvey. The bulk of these price increases will affect CPI in September. Forwards imply that prices will normalize quickly during the Autumn, but new hurricanes means that this forecast is uncertain.

• Underlying inflation has continued to surprise on the downside and so has wage growth. At the same time the high inflation on rents is showing signs of turning over. We predict inflation to remain low in 2018.

Friday 15, 11.00

EMU: Trade balance (Jul) Bn EUR SEB Cons. Prev

SA 20.0 --- 22.3

NSA --- --- 26.6

The trade balance (SA) has been around EUR 20 bn for the last couple of years and is expected to stay at that level also in July.

In June, weak imports pushed the balance higher. German (the main contributor the EMU trade balance surplus) June-data show that exports grew at a slower pace than imports and that the trade balance fell compared. Looking ahead, the recovery in the region is expected to push imports higher and the trade balance lower.

Friday 15, 14.30

US: Retail sales (Aug)

Headline retail sales beat expectations in July and rose by a healthy 0.6% m/m. Amazon’s Prime Day event likely contributed to the rise in sales. Data for June was revised upward and reinforces the view that retail sales are off to a strong start in Q3. Auto sales edged up in July.

Control group sales, used to calculate GDP, also printed better than expected in July.

Weak vehicle sales continue to weigh on headline retail sales and the number of units sold fell much more than expected in August. Gasoline prices rose slightly in August and will support station sales.

Our forecast is that headline retail sales fell by 0.1% but that control group sales rose by 0.4% in August.

% mom SEB Cons. Prev.

Advance -0.1 0.1 0.6

Less autos 0.5 0.4 0.5

Ex auto & gas 0.4 0.3 0.5

Retail control group 0.4 0.2 0.6

Friday 15, 15.15

US: Industrial prod. & capacity util. (Aug)

Industrial production rose by a weaker than expected 0.2% m/m in July following a solid 0.4% increase in June. Utility and mining output increased but manufacturing production fell slightly.

The fall in manufacturing production was mainly driven by a drop in motor vehicle output. Weak auto sales suggest that prospects for auto manufacturers will remain downbeat. However, the weaker dollar should provide support to the manufacturing sector.

The ISM production sub-index rose slightly in August to 61.0. This is a historically high level, suggesting that manufacturing output will rebound.

Capacity utilization edged up to 76.7%. Utilization is trending upward but is still some way below the 80%-level at which investments usually take off.

Our forecast is that industrial was unchanged in August and that manufacturing production increased by 0.2% m/m.

% SEB Cons. Prev.

Industrial production mom 0.0 0.1 0.2

Capacity utilization 76.7 76.8 76.7

Manufacturing prod. mom 0.2 0.5 -0.1

Friday 15, 16.00

US: Uni. of Michigan consumer conf. (Sep, P)

The Michigan consumer confidence index rose sharply in August and hit a three-month high. The improvement was entirely due to the expectations index rising.

The expectations index is now consistent with annualised consumption growth of over 5%.

Confidence has been supported by low gasoline prices, a tight labor market and stock markets close to record levels. However, equity indices have edged down lately and gasoline prices have spiked driven by hurricane Harvey.

In August, households’ 12-month ahead inflation expectations remained at 2.6%. Expected inflation in five years’ time edged down to 2.5%.

The Conference Board index rose in August but correlation to the Michigan index has weakened in 2017.

We expect that the Michigan index weakened slightly in September and forecast 96.0.

SEB Cons. Prev.

Preliminary 96.0 96.5 96.8

European Sovereign Rating Reviews

Friday, 01 Sep 2017 Agency previous new action

Czech Republic Fitch A+ / Stable A+ / Positive outlook raised

Lithuania S&P A- / Stable A- / Stable outlook raised

Portugal Moody's Ba1 / Stable Ba1 / Stable outlook raised

Friday, 08 Sep 2017 Agency Rating / Outlook last change Change?

Lithuania Moody's A3 / Stable 05/08/2015 no

Poland Moody's A2 / Stable 05/12/2017 no

Slovenia Moody's Baa3 / Positive 09/16/2016 upgrade?

Friday, 15 Sep 2017 Agency Rating / Outlook last change Change?

Austria S&P AA+ / Stable 01/29/2013 no

Cyprus S&P BB+ / Stable 03/17/2017 no

Denmark S&P AAA / Stable 09/26/2007 no

Finland S&P AA+ / Stable 09/16/2016 no

Ireland Moody's A3 / Positive 05/14/2016 upgrade?

Luxembourg S&P AAA / Stable 01/14/2013 no

Portugal S&P BB+ u / Stable 09/18/2015 noSource: Bloomberg

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