Growth accelerating, but difficult

Nordic Outlook                 post-crisis choices ahead
                               ...
Contents



International overview    5




The United Kingdom       28




Boxes




                              Nordic...
Economic Research




    This report was published on May 4, 2010.

    Cut-off date for calculations and forecasts was Ap...
International overview



 Recovery despite imbalances and crises
                                      the
              ...
International overview




                                                           2008   2009   2010 2011




        ...
International overview




                                                         2000 2009     2000 2009          2000 ...
International overview




                                             5




           82         88




               ...
International overview




     SEB




US




           8                                                    8



      ...
International overview




                         Key interest rates




       5                                       ...
International overview




                                          system




                                          ...
International overview




12 | Nordic Outlook – May 2010
International overview




           Nordic Outlook – May 2010 | 13
Theme: Reforming the financial infrastructure




                                                                         ...
Theme




                                                                                               12.0
            ...
The United States




                                                                                                    ...
The United States




                     Ratio




      82   88




225




25



                85




              ...
The United States




                                                                                   gov




    2011
...
The United States




                                                    25                                          25

...
The United States




                88




                                         Federal debt




                   ...
Japan
                                                                        Japan




                                  ...
Asia




          per cent




                                  2011.




                                              ...
The euro zone




                 SEB
               forecast




85


                     Exports




     Nordic Outlo...
The euro zone




                                                                                      5




    After  G...
The euro zone




                                                                                                        ...
The euro zone




                                                        SEB




             Core inflation      HICP in...
The euro zone




Bond yields




The  table  shows  by  how  many  hundredths  of  a  percentage  
point  (basis  points)...
The United Kingdom




                                          225                                                225


...
Easten Europe




                             Poland




                  Index




         Poland
                  Sl...
The Baltics




     A



                                                              domestic demand




              ...
The Baltics




                                                                         Latvian government
              ...
Sweden




          9.00




     Nordic Outlook




                                  5




 32 | Nordic Outlook – May 2...
Sweden




              2009 2009 2010 2011




     Sweden
US




                  Nordic Outlook – May 2010 | 33
Sweden




                                                                               28




                         ...
Sweden




            and 2.2 per cent in 2011




indicates




                                     GDP  at  turning  p...
Sweden




                                 2010         2011   Employees




    of Nordic Outlook that



              ...
Sweden




                                         SEB




                    Sweden




          SEB

                ...
Sweden




    per cent




                                 2008 2009 2010 2011




38 | Nordic Outlook – May 2010
Sweden




Nordic Outlook




                 2010      2011




                        In 2010 and




                ...
Sweden




    be extra clear.




40 | Nordic Outlook – May 2010
Denmark
                                                                                       Denmark




               ...
Norway




                                                                                    2010




     demand




  ...
Norway




     Unemployment  shows  signs  of  peaking  
%  of  labour  force                                   %  of  la...
Norway



                                                                                                         modus o...
Finland




               cent in 2011




       Index                                                    Pay

         ...
Nordic key economic data




                                               2009 level,
                                  ...
Nordic key economic data




                      2009 level,
                        SEK bn      2008   2009   2010     ...
Nordic key economic data




                                               2009 level,
                                  ...
Nordic key economic data




              2008   2009   2010   2011
GDP,




Bond yields




              2008   2009   ...
Economic Research available on Internet.
    Nordic Outlook published by SEB Economic Research is available on the Interne...
Finland
                                                                                St: Petersburg
                   ...
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Transcript of "Nordic Outlook May 2010"

  1. 1. Growth accelerating, but difficult Nordic Outlook post-crisis choices ahead New focus on government debt Economic Research – May 2010 and financial regulations
  2. 2. Contents International overview 5 The United Kingdom 28 Boxes Nordic Outlook – May 2010 | 3
  3. 3. Economic Research This report was published on May 4, 2010. Cut-off date for calculations and forecasts was April 29, 2010. Robert Bergqvist Håkan Frisén Chief Economist Head of Economic Research + 46 8 506 230 16 + 46 8 763 80 67 Daniel Bergvall Mattias Bruér Economist Economist +46 8 763 85 94 + 46 8 763 85 06 Ann Enshagen Lavebrink Mikael Johansson Editorial Assistant Economist + 46 8 763 80 77 + 46 8 763 80 93 Tomas Lindström Economist + 46 8 763 80 28 Gunilla Nyström Ingela Hemming Global Head of Personal Finance Research Global Head of Small Business Research + 46 8 763 65 81 + 46 8 763 82 97 Susanne Eliasson Johanna Wahlsten Personal Finance Analyst Small Business Analyst + 46 8 763 65 88 + 46 8 763 80 72 SEB Economic Research, K-A3, SE-106 40 Stockholm Contributions to this report have been made by Thomas Köbel, Klaus Schrüfer, SEB Frankfurt/M and Olle Holmgren, Trading Strategy. Stein Bruun, SEB Oslo is responsible for the Norwegian analysis See disclaimer on page 50. 4 | Nordic Outlook – May 2010
  4. 4. International overview Recovery despite imbalances and crises the opment (OECD) reassessed and a SEB The OECD economies mitments American German Nordic Outlook – May 2010 | 5
  5. 5. International overview 2008 2009 2010 2011 OECD World, PPP* 6 | Nordic Outlook – May 2010
  6. 6. International overview 2000 2009 2000 2009 2000 2009 cent tre recovery dip scenario GDP OECD positive spiral in Nordic Outlook – May 2010 | 7
  7. 7. International overview 5 82 88 US The ally been resilient 8 | Nordic Outlook – May 2010
  8. 8. International overview SEB US 8 8 5 5 2 2 Nov Jan Sep Nov Jan Sweden United Kingdom US Nordic Outlook – May 2010 | 9
  9. 9. International overview Key interest rates 5 SEB 5 tries 2 2 US Bank of England SEB December be US 10 | Nordic Outlook – May 2010
  10. 10. International overview system Currency  movements  since  the  EUR/USD  peak Percentage  change  against  USD  since  December  3,  2009 5,0% 3,0% 1,0% -­1,0% -­3,0% -­5,0% -­7,0% -­9,0% -­11,0% -­13,0% Jan Sep Jan Sep Jan Sep Jan -­15,0% D D XN W ZD Y L K P F N R Y B R K Y R H N TR B JP A U O IN U PL SE EU R N B C M C G C A R N K The Japanese yen The Nordic Outlook – May 2010 | 11
  11. 11. International overview 12 | Nordic Outlook – May 2010
  12. 12. International overview Nordic Outlook – May 2010 | 13
  13. 13. Theme: Reforming the financial infrastructure Settlements Financial Stability Board ( more and ( resilience and stability more proposals TODAY FUTURE =  Real  economy =  Credit/banking  market 14 | Nordic Outlook – May 2010
  14. 14. Theme 12.0 Credit growth 10.0 8.0 6.0 4.0 2.0 0.0 -­2.0 900 Expected  writedowns,  USD  bn 800 180 Realised  writedowns,  USD  bn 700 600 280 500 400 100 680 300 200 400 350 70 100 100 80 20 0 US UK Eurozone Other Asia Europe Nordic Outlook – May 2010 | 15
  15. 15. The United States 5 2 GDP per cent next year 6 6 5 5 4 4 3 3 2 2 1 1 0 0 -­1 -­1 -­2 -­2 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 09 10 11  Inventory  contribution  GDP  growth  Net  effect  of  stimulus Source:  CBO,  Recovery.gov,  SEB Index 25 55 5 88 16 | Nordic Outlook – May 2010
  16. 16. The United States Ratio 82 88 225 25 85 Nordic Outlook – May 2010 | 17
  17. 17. The United States gov 2011 We expect US 8.9 per cent in 2011 85 85 FHFA 18 | Nordic Outlook – May 2010
  18. 18. The United States 25 25 5 5 55 85 CPI inflation 88 5 SEB 5 2 2 5 5 Core inflation Headline inflation 85 Nordic Outlook – May 2010 | 19
  19. 19. The United States 88 Federal debt One  common  rule  of  thumb   is  that  government  bond  yields  rise  by  about  50  basis   points  if  their  credit  rating  is  downgraded  by  one  step. Debt to GDP ratios * SEB 82 88 United Kingdom Canada 20 | Nordic Outlook – May 2010
  20. 20. Japan Japan and Jan Sep Jan Sep Jan Sep Jan Sep Jan that the Nordic Outlook – May 2010 | 21
  21. 21. Asia per cent 2011. 15.0 12.5 10.0 7.5 5.0 2.5 0.0 -­2.5 Jan Sep Jan Sep Jan Sep Jan China India 22 | Nordic Outlook – May 2010
  22. 22. The euro zone SEB forecast 85 Exports Nordic Outlook – May 2010 | 23
  23. 23. The euro zone 5 After  Greece,  Portugal  is  the  country  that  runs  the  great-­ est  risk  of  being  hit  by  market  instability.  Large  government   political  experience  of  belt-­tightening  programmes,  make   this  small  economy  highly  vulnerable.  After  that  comes   Spain,  whose  extremely  high  unemployment  and  weak   real  estate  market  provide  fertile  ground  for  market  scepti-­ cism  to  emerge. Finland 10.2 Finland Italy Slovenia Slovakia Spain Ireland trend in Germany 24 | Nordic Outlook – May 2010
  24. 24. The euro zone , that cent next year 2009 Budget  balance,  debt  and  current  account  (CA)  are  measured  as   HICP,   Core)  as  the   Spain Ireland Italy each  country  and  the  euro  zone  average. Source:  European  Commission,  IMF,  SEB Nordic Outlook – May 2010 | 25
  25. 25. The euro zone SEB Core inflation HICP inflation Jan Apr Jan Apr Jan Apr Refi rate 26 | Nordic Outlook – May 2010
  26. 26. The euro zone Bond yields The  table  shows  by  how  many  hundredths  of  a  percentage   point  (basis  points)  yields  with  different  maturities  (10,  5  and   2  years)  and  yield  curves  (10yr-­3m,  5yr-­3m,  2yr-­3m)  are   government  debt  are  one  percentage  point  higher. Source:  SEB Nordic Outlook – May 2010 | 27
  27. 27. The United Kingdom 225 225 25 25 fall to Jan Apr Jan Apr Jan Apr United Kingdom Italy Nordic Outlook 28 | Nordic Outlook – May 2010
  28. 28. Easten Europe Poland Index Poland Slovakia We are Nordic Outlook – May 2010 | 29
  29. 29. The Baltics A domestic demand ances Exports matically 06 07 08 09 Latvia 30 | Nordic Outlook – May 2010
  30. 30. The Baltics Latvian government priority Eastern European Out-‐ look 5 85 The are strained Slovakia on Nordic Outlook – May 2010 | 31
  31. 31. Sweden 9.00 Nordic Outlook 5 32 | Nordic Outlook – May 2010
  32. 32. Sweden 2009 2009 2010 2011 Sweden US Nordic Outlook – May 2010 | 33
  33. 33. Sweden 28 22 85 small 2008 2009 2010 2011 98 99 00 01 02 03 04 05 06 07 08 09 10 11 Employment  has  turned  around 4650 Number  of  jobs,  thousands  (LHS) 9.0 Unemployment,  per  cent  (RHS) 4600 8.5 4550 8.0 4500 7.5 4450 SEB 7.0 4400 6.5 4350 6.0 4300 5.5 05 06 07 08 09 10 11 Source:  Statistics  S eden,  S B w E and then 34 | Nordic Outlook – May 2010
  34. 34. Sweden and 2.2 per cent in 2011 indicates GDP  at  turning  points Index 104 104 1993Q3  =  100 103 103 2005Q1  =  100 102 102 1997Q1  =  100 101 101 100 100 2009Q1  =  100 99 99 1  year Source:  Statistics  Sweden,  SEB Employment  at  turning  points Index 102.0 102.0 May  2005  =  100 101.5 101.5 March  1994  =  100 101.0 101.0 May  1997  =  100 100.5 100.5 Sep.  2009  =  100 100.0 100.0 99.5 99.5 1  year Source:  Statistics  Sweden,  SEB Nordic Outlook – May 2010 | 35
  35. 35. Sweden 2010 2011 Employees of Nordic Outlook that Total lending We are jan maj jan maj jan maj jan maj CPIF 36 | Nordic Outlook – May 2010
  36. 36. Sweden SEB Sweden SEB 8 5 82 88 Nordic Outlook – May 2010 | 37
  37. 37. Sweden per cent 2008 2009 2010 2011 38 | Nordic Outlook – May 2010
  38. 38. Sweden Nordic Outlook 2010 2011 In 2010 and Nordic Outlook – May 2010 | 39
  39. 39. Sweden be extra clear. 40 | Nordic Outlook – May 2010
  40. 40. Denmark Denmark World Economic Outlook overheating are mand points. 1.8 per cent in 2011 stabilisation tendencies in Nordic Outlook – May 2010 | 41
  41. 41. Norway 2010 demand Strong  income  supports  consumption   %  change  (4Q) %  change  (4Q),  2Q  average 10 10 8 8 re 6 6 covery in residential investment 4 4 2 2 0 0 -­2 -­2 -­4 -­4 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 Private  consumption  (LHS) The Norwegian Real  disposable  income  excl.  share  dividends  (LHS)   42 | Nordic Outlook – May 2010
  42. 42. Norway Unemployment  shows  signs  of  peaking   %  of  labour  force %  of  labour  force 8 8 7 7 6 6 5 5 4 4 Core  inflation  heading  lower   3 3 %  change  (12M) %  change  (12M) 2 2 6.0 6.0 1 1 4.5 4.5 0 0 3.0 3.0 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 1.5 1.5 LFS  unemployment  rate,  3  mth.  average Registered  unemployed   0.0 0.0 -­1.5 -­1.5 -­3.0 -­3.0 -­4.5 -­4.5 95 97 99 01 03 05 07 09 CPI  excl.  taxes  and  energy Core  CPI  domestic  goods  and  services Core  CPI  imported  consumer  goods   Wage  growth  and  unemployment   %  change  (YoY) %  of  labour  force 10.5 0 9.0 1 in 2009 7.5 2 6.0 3 4.5 4 3.0 5 1.5 6 0.0 7 87 89 91 93 95 97 99 01 03 05 07 09 11 Annual  wages  (LHS) LFS  unemployment  rate  (RHS)   Nordic Outlook – May 2010 | 43
  43. 43. Norway modus operandi Monetary Policy Report Monetary Policy Report Norges  Bank  deposit  rate  and  rate  path   Level,  % Level,  % Stronger  NOK  is  denting  inflation   10 10 %  change  (12M) %  change  (12M),  reversed 9 9 6 -­20 8 8 -­15 4 7 7 -­10 6 6 2 5 5 -­5 4 4 0 0 3 3 5 2 2 -­2 10 1 1 -­4 0 0 15 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 -­6 20 Norges  Bank  deposit  rate Optimal  rate  path,  MPR  1/10 99 00 01 02 03 04 05 06 07 08 09 10 Optimal  rate  path,  MPR  3/09   Core  CPI  imported  consumer  goods  (LHS) NOK  import-­weighted  index,  6  mth.  earlier  (RHS)   44 | Nordic Outlook – May 2010
  44. 44. Finland cent in 2011 Index Pay and next Increased activity early in 2010 8 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 year Nordic Outlook – May 2010 | 45
  45. 45. Nordic key economic data 2009 level, DKK bn 2008 2009 2010 2011 2009 level, 46 | Nordic Outlook – May 2010
  46. 46. Nordic key economic data 2009 level, SEK bn 2008 2009 2010 2011 FINANCIAL FORECASTS 2009 level, EUR bn 2008 2009 2010 2011 Nordic Outlook – May 2010 | 47
  47. 47. Nordic key economic data 2009 level, EUR bn 2008 2009 2010 2011 US 2009 level, USD bn 2008 2009 2010 2011 2008 2009 2010 2011 GDP Unemployment 48 | Nordic Outlook – May 2010
  48. 48. Nordic key economic data 2008 2009 2010 2011 GDP, Bond yields 2008 2009 2010 2011 Nordic Outlook – May 2010 | 49
  49. 49. Economic Research available on Internet. Nordic Outlook published by SEB Economic Research is available on the Internet at: www.seb.se. This page is open to all. To get access to all other research and trading recommendations for Merchant Banking’s customers on the Internet at www.mb.se, a password is needed that is exclusice to these clients. If you wish to get access to this web site, please contact Merchant Banking to receive the password. Technical requirements Most of our research is published in PDF format (Portable Document format). Adobe Acrobate software, which reads PDF documents, is free of charge and can be downloaded from Adobe’s web site at: www.adobe.com. This report is directed only at persons who (i) are outside the United Kingdom, (ii) have professional experience in matters relating to investments falling within article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (as amended) (the “Order”), (iii) are persons falling within articles 49(2)(a) to (d) (“high net worth companies, unincorporated associations etc.”) of the Order or (iv) persons who are intermediate customers under chapter 4 of the FSA conduct of business rules (all such persons being referred to as “relevant persons”). This document does not constitute an offer or invitation to subscribe for or purchase any securities and neither this document nor anything contained herein shall form the basis of any contract or commitment whatsoever. Recipients are urged to base their decisions upon such investigations as they deem necessary. All information contained in this report has been compiled in good faith from sources believed to be reliable. However, no representation or warranty, express or implied, is made as to the accuracy, completeness or fairness of the information and opinions contained in this document. In addition SEB accepts no liability whatsoever for any loss howsoever arising from any use of this document or its contents or otherwise arising in connection therewith. Your attention is drawn to the fact that a member of, or any entity associated with SEB or its affiliates, officers, directors, employees or sharheolders of such members may from time to time have a long or short position in, or otherwise participate in the markets for, the securities and the currencies of countries mentioned herein. Skandinaviska Enskilda Banken AB (publ) is incorporated in Stockholm, Sweden with limited liability and is a member of the Stockholm Stock Exchange; it is regulated by the Financial Services Authority for the conduct of designated investment business in the UK; and is a member of the London Stock Exchange. Transactions involving debt securities will be executed by or with the Bank unless you are informed otherwise at the time of dealing. Confidentiality Notice This report is confidential and may not be reproduced or redistributed to any person other than its recipient from the Bank. Skandinaviska Enskilda Banken AB (publ), 2010. All rights reserved. 50 | Nordic Outlook – May 2010
  50. 50. Finland St: Petersburg Norway Moskva Russia Sweden Estonia Latvia New York Denmark Beijing Lithuania Dublin Shanghai London New Delhi Poland Germany Warzaw Ukraine Paris Luxemburg Kiev Singapore Geneve Nice São Paulo SEB is a North European financial group serving some , corporate customers and institutions and five million private individuals. SEB offers universal banking services in Sweden, Germany and the Baltic countries – Estonia, Latvia and Lithuania. It also has local presence in the other Nordic countries, Ukraine and Russia and a global presence through its international network in major financial centres. On March , , the Group’s total assets amounted to SEK , bn while its assets under management totalled SEK , bn. The Group has about , employees. Read more about SEB at www.sebgroup.com. With capital, knowledge and experience, we generate value for our customers − a task in which our research activities are highly beneficial. Macroeconomic assessments are provided by our Economic Research unit. Based on current conditions, official policies and the long-term performance of the financial market, the Bank presents its views on the economic situation − locally, regionally and globally. One of the key publications from the Economic Research unit is the quarterly Nordic Outlook, which presents analyses covering the economic situation in the world as well as Europe and Sweden. Another publication is Eastern European Outlook, which deals with the Baltics, Poland, Russia and Ukraine and appears twice a year. www.sebgroup.com

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