This document provides a quarterly macroeconomic update for Q1 2019. It discusses slowing global growth while the US and EU continue growing. Inflation is rising due to tight labor markets but falling oil prices are holding it back short-term. Emerging markets and China are growing more slowly. The document also summarizes economic indicators and trends in the Nordic region, including GDP, inflation, unemployment, consumer confidence, car registrations, employment, construction, and currencies.

1. 2019 Q11
2019 Q1 Macro – Quarterly update: Wind of Change
Please see important disclosures and disclaimers on page 25

2. 2019 Q12
Index
1. Executive summary
2. Current economic topics
3. Global macro
• GDP, unemployment & inflation
• Leading indicators
• Commodities
4. Nordic region
• GDP, unemployment, consumer confidence & inflation
• Car registrations & employment
• Construction & business confidence
• Bankruptcies & construction costs
• Currencies & interest rates
5. Appendix
Please contact content providers for inquiries:
Søren Steenstrup, soeren.steenstrup@tryg.dk
Kenneth Winther, kenneth.winther@tryg.dk

3. 2019 Q13
Executive summary
Wind of Change
• Global growth is dropping, although the level remains constructive. The US and EU are
expected to continue growing despite deteriorating data. Inflation pressure is building due to a
tighter labor market, but is held back by a severe decline in oil prices in the short term (s. 14).
Emerging markets (EM) and especially Chinese growth on the weak side, but is still high
compared to the US and EU
• President Trump is engaged in two new confrontations in December. One with the Democrats
around financing for the Mexican border wall, which has led to a partial government
shutdown. And the other, slamming the Federal Reserve (Fed) for hiking interest rates too
fast, and implicitly threatening to fire chairman Powell. As central bank independence is seen as
sacrosanct, this is scaring economists and investors alike
• Despite this backdrop, the Federal Reserve remains constructive around the US economy and
will likely continue the hiking cycle in 2019. The Fed has, however, indicated that the number of
hikes will be lower than in 2018 as the interest rate level is normalized and Global political
events can damage growth
• Europe’s political landscape is changing fast as France’s president Macron has given up on
planned fuel tax increases after massive protests by the Guilet Jaune (“Yellow Vests”)
movement. In order to make the protest stop, Macron also decided to increase minimum wages
and lower taxes for pensioners, which is making Frances expected budget deficit even worse.
This combined with a spending-happy Italian Government, a “leaderless” Germany and an
impeding Brexit, creates a lot of uncertainty in the beginning of 2019
• Chinese growth is a on the weak side as shadow bank lending is falling and the US trade war is
taking its toll. The authorities are therefore pulling all their economic levers to stimulate
growth; tax cuts, favorable government loans to banks and lower reserve ratio for banks. While
this definitely helps, growth is expected to only be slightly above 6% in 2019
• Nordic countries have shown positive growth and inflation remains low, except in Norway.
Unemployment rates have been constant, except for the fall in Sweden, and employment growth
remains healthy. New car registrations in Sweden has been negatively affected by the increase of
registration taxes on July 1st. Construction confidence remains high in Denmark and has waned
in Sweden, while business confidence remains high

4. 2019 Q14
Current Economic Topics

5. 2018 Q45
Current topics – Wind of change
• The European political landscape is changing fast, and the last couple of months has made it abundantly clear just how fragile the
European Union is
• In France, the Gilets Jaunes (“Yellow vests”) movement has protested in the streets against primarily fuel price increases, but
can be seen as a broad dissatisfaction among the working class. The protestors demands have expanded and escalated to a populistic
revolt against the system. President Macron is now wildly unpopular and has backtracked: a) Abandoned the fuel tax, increased
minimum wages and cut taxes for pensioners and b) Introduced a new media tax on foreign companies to partially plug the budget
gap
• Macron is facing challenges in executing his reforms and will have a hard time to avoid fiscal slippage and meet the budget
deficit 3% Maastricht ceiling in 2019
• Elsewhere on the continent, the Italian populistic government has agreed with the EU “only” to run a budget deficit of 2.04% in
2019. While the budget is not optimal, it is hard for the European Commission to push further with France being allowed to run a larger
deficit without repercussions. Furthermore, Germany’s Angela Merkel is in effect a “lame duck” as she has stepped down as
chairwoman of CDU and it’s highly uncertain where Brexit proceedings will land in 2019. All this is even before mentioning the political
challenges in the rest of Europe, e.g. Sweden or Poland
• While the European economy is currently doing fine, Europe is effectively without leadership in the near future, which is
dangerous if growth starts to wane or geopolitical tensions increase
5
”Tubthumping” yellow vests and unhappy President Macron Sources: Obier (left), Vicomte56 (right)

6. 6
Current topics – A nightmare before Christmas
• Trump is no stranger to stand-offs and just before Christmas he found himself engaged in two new ones
• Firstly, President Trump is going head-to-head with Democrats as they cannot agree on funding for the Mexican border wall. This
has resulted in a partial government shutdown since December 22nd 2018, which has affected ca. 800.000 public servants. How
long this stalemate will continue is unclear, but the longer it drags out, the more uncertainty it creates
• Secondly, President Trump has taken aim at Fed chairman Powell and is implicitly threatening to fire him for hiking interest rates
too fast and labeled the Fed as the US economy’s “only problem”. Trump is thus taking a dangerous path, as central bank
independence is extremely important to avoid monetary policy being abused by politicians
• This political uncertainty comes at a very bad time when economic growth, although high, is decelerating. This has resulted in
widespread fear among investors and economists alike (right graph)
Sources: U.S. Customs and Border Protection, Bloomberg and Tryg Invest
Global equity markets in 2018 Q4…rough rideBeautiful walls – Trump looking at wall prototypes
80
85
90
95
100
105
110
01-jan 01-mar 01-maj 01-jul 01-sep 01-nov 01-jan
S&P 500 MSCI EM EuroStoxx 50
6

7. 2019 Q17
Current topics – ‘Tip Toe’ monetary policy
• Apart from the political noise from Trump (see previous slide), Central banks remain fairly constructive around economic
growth
• The Fed concluded it’s December meeting with a hike to 2.5% and thus bringing the total number of hikes to 4 in 2018.
However, in 2019 there is expected a bit more of a “tip toe” approach as economic data is softer and political risks (see
previous slides) could hurt growth. The Fed now projects only 2 rate hikes in 2019 (see figure left), which implies a 3% policy
interest rate. This level is also considered a long run “neutral interest rate” by the Fed
• On the other side of the pond, the European Central Bank has finally concluded its bond buying programme and is currently
expected to raise interest rates during the “late part” of H2 2019 if the economy doesn’t deteriorate
7
Interest rate predictions from individual Fed Governors ( “The Dot Plot”)*
Sources: Federal Reserve, The White House and Tryg Invest
1,0%
1,5%
2,0%
2,5%
3,0%
3,5%
4,0%
4,5%
September December
2019 2020 2021 Longer term
*Lines indicate median interest rate
#DoNotRaiseRatesAgain!
Fed Chairman Powell and President Trump

8. 2019 Q18
Current topics – China’s Year of the Stimulus
• Christmas came early as the Chinese authorities decided to
stimulate the economy with both fiscal and monetary policy
• China’s growth is structurally coming down as the economy matures,
but government clamp down on shadow bank financing (figure
lower left) and Trump’s trade war are slowing growth too much
(figure upper right)
• The government also wants to stimulate private consumption by
lowering taxes by upward of 1%-points of GDP and offer very attractive
loans to banks if they lend out to the “real economy”
• This comes on top of the People’s Bank of China decision to lower
the required reserve ratio for banks to the lowest level since 2007 in
order to stimulate banks’ lending (figure lower right)
8
Required Reserve Ratio for major banks (%)
Sources: Bloomberg and Tryg Invest
5%
10%
15%
20%
25%
2007 2009 2011 2013 2015 2017
Growth in shadow bank financing (YoY, %)
-20%
0%
20%
40%
60%
80%
2011 2012 2013 2014 2015 2016 2017 2018
5,0%
5,5%
6,0%
6,5%
7,0%
7,5%
8,0%
2013 2014 2015 2016 2017 2018 2019 2020
GDP growth Estimate
China’s GDP growth estimate (YoY, %)

9. 2019 Q19
Global Macro

10. 2019 Q110
Global macro – Economic indicators
GDP, QoQ, % Unemployment rate, %
Inflation rate, % Interest rate, 10yr, %
-15%
-10%
-5%
0%
5%
10%
15%
2010 2012 2014 2016 2018
USA EU Japan
Last Observation: 2018Q3
-2%
-1%
0%
1%
2%
3%
4%
5%
6%
2010 2012 2014 2016 2018
USA EU Japan
Last Observation: 2018M11
0%
2%
4%
6%
8%
10%
12%
14%
2010 2012 2014 2016 2018
USA EU Japan
Last Observation: 2018M11
-1%
0%
1%
2%
3%
4%
5%
2010 2012 2014 2016 2018
USA Germany Japan
Figure sources: Bloomberg Finance L.P. and Tryg Invest

11. 2019 Q111
Global macro - Leading indicators
PMI/ISM Consumer Confidence, US
IFO, Germany
Index description
• PMI measures companies’ expectations for the Eurozone,
where values above 50 indicates economic expansion and
vice versa.
• ISM measures companies’ expectations for the US, where
values above 50 indicates economic expansion and vice
versa.
• IFO measures business’ current assessment and
expectations for the next 6 month for Germany, where a
rising index-value indicates economic expansion and vice
versa.
0
20
40
60
80
100
120
140
160
2010 2012 2014 2016 2018
Conference Board UoM, Consumer Confidence UoM, Consumer Expectation
Last Observation: 2018M12
70
80
90
100
110
120
130
2010 2012 2014 2016 2018
IFO Business Climate IFO Expectations IFO Current Assessment
Last Observation: 2018M12
30
35
40
45
50
55
60
65
2010 2012 2014 2016 2018
ISM, Manufacturing, US ISM, Non-manufacturing, US
PMI Manufacturing, EU PMI Services, EU
Last Observation: 2018M12
Figure sources: Bloomberg Finance L.P. and Tryg Invest

12. 2019 Q112
Global macro – Business Cycle Clock
OECD Global Composite Leading Indicator* – Indicating Global downturn
*OECD CLI measures the global growth momentum 6 month forward. A value above 100 indicates
positive economic momentum.
-1,0
-0,8
-0,6
-0,4
-0,2
0,0
0,2
0,4
0,6
0,8
1,0
95 96 97 98 99 100 101 102 103 104 105
2002 2003 2004 2005 2006 2007 2008 2009 2010
2011 2012 2013 2014 2015 2016 2017 2018
Downturn
Upturn Expansion
Slowdown
CLI
ChangeinCLI
Last observation: October-2018
Figure sources: Bloomberg Finance L.P. and Tryg Invest

13. 2019 Q113
Global macro – Business Cycle Clock
IFO German Business Climate* – Indicating German slowdown
*The IFO-indicators measures German companies’ assessment of their business situation currently and
expectations 6 month forward. A value above 100 indicates positive economic momentum.
75
80
85
90
95
100
105
110
115
120
125
70 80 90 100 110 120 130
2002 2003 2004 2005 2006 2007 2008 2009 2010
2011 2012 2013 2014 2015 2016 2017 2018
Downturn
Upturn Expansion
Slowdown
IFO Current Assessment
IFOExpectations
Last observation: December-2018
Figure sources: Bloomberg Finance L.P. and Tryg Invest

14. 2019 Q114
Global macro - Commodities
Broad Commodity Index and Food Index* Agriculture
Metals* Oil
*Broad Commodity Index consists of following futures: Cotton, Orange Juice, RBOB Gasoline, Heating Oil, Wheat, Corn, Soybeans, Coffee, Live Cattle, Crude Oil, Cocoa, Gold,
Aluminum, Silver, Nickel, Lean Hogs, Sugar, Copper and Natural Gas. Food Index: Hogs, Steers, Lard, Butter, Soybean oil, Cocoa, Corn, Wheat and Sugar. Metal Index: Copper,
Lead, Steel, Tin and Zinc.
100
150
200
250
300
350
400
450
500
550
2010 2012 2014 2016 2018
Broad Commodity Index Food Index
200
400
600
800
1.000
1.200
1.400
1.600
1.800
2.000
2010 2012 2014 2016 2018
Corn Wheat Soybeans$/bushel
0
200
400
600
800
1.000
1.200
0
2.000
4.000
6.000
8.000
10.000
12.000
2010 2012 2014 2016 2018
Aluminum (left) Copper (left) Metal Index (right)$/tonne
0
20
40
60
80
100
120
140
2010 2012 2014 2016 2018
Brent Nymex$/barrel
Figure sources: Bloomberg Finance L.P. and Tryg Invest

15. 15
Nordic Region
2019 Q1

16. 2019 Q116
Nordic region – Economic indicators
GDP, YoY, % Consumer Confidence (higher value indicates more optimism)
Inflation rate, % Unemployment rate, %
70
85
100
115
130
145
160
-20
-15
-10
-5
0
5
10
15
20
25
30
35
2010 2012 2014 2016 2018
Denmark Norway Sweden (right)
Last Observation: 2018M12
-1%
0%
1%
2%
3%
4%
5%
2010 2012 2014 2016 2018
Denmark Norway Sweden
Last Observation: 2018M11
0%
1%
2%
3%
4%
5%
6%
7%
8%
9%
10%
2010 2012 2014 2016 2018
Denmark Norway Sweden
Last Observation: 2018M10
-4%
-2%
0%
2%
4%
6%
8%
10%
2010 2012 2014 2016 2018
Denmark Norway Sweden
Last Observation: 2018Q3
Figure sources: Bloomberg Finance L.P. and Tryg Invest

17. 2019 Q117
Nordic region – Car registrations and employment
New car registrations (YoY), % New car registrations, # of vehicles
Total employment (YoY), % Total employment (YoY), %
-60%
-40%
-20%
0%
20%
40%
60%
80%
Denmark Norway Sweden
Q4 2017 Q1 2018 Q2 2018 Q3 2018
0
10.000
20.000
30.000
40.000
50.000
60.000
70.000
2010 2012 2014 2016 2018
Denmark Norway Sweden
Last Observation: 2018M9
0,0%
0,5%
1,0%
1,5%
2,0%
2,5%
3,0%
Denmark Norway Sweden
Q3 2017 Q4 2017 Q1 2018 Q2 2018
-3%
-2%
-1%
0%
1%
2%
3%
4%
2010 2012 2014 2016 2018
Denmark Norway Sweden
Last Observation: 2018M9
Figure sources: Bloomberg Finance L.P. and Tryg Invest

18. 2019 Q118
Nordic region – Construction and Business Confidence
Denmark construction confidence survey Sweden construction confidence survey
Nordic confidence surveys …
Index description
• Construction confidence and order book assessment
measures construction companies’ current
expectations for the activity compared to a “normal
level”, where values above 0 indicates optimism and
vice versa
• PMI measures companies’ expectations for the local
economy, where values above 50 indicates economic
expansion and vice versa
• Economic Sentiment Indicator measures companies
and consumers’ expectations to the Danish economy,
where values above 100 indicates economic expansion
and vice versa
-70
-60
-50
-40
-30
-20
-10
0
10
2010 2012 2014 2016 2018
DK Construction Confidence DK Order Book Assessment
Last Observation: 2018M11
-100
-80
-60
-40
-20
0
20
40
60
2010 2012 2014 2016 2018
SE Construction Confidence SE Order Book Assessment
Last Observation: 2018M11
30
35
40
45
50
55
60
65
70
60
70
80
90
100
110
120
130
140
2010 2012 2014 2016 2018
DK Economic Sentiment Indicator (left) SE PMI (right) NO PMI (right)
Last Observation: 2018M11
Figure sources: Bloomberg Finance L.P. and Tryg Invest

19. 2019 Q119
Nordic region – Bankruptcies and Construction Costs
Bankruptcies (#) Building costs (YoY, %)
Norwegian types of residential building costs (YoY, %) Norwegian construction wage cost (YoY, %)
0
200
400
600
800
1.000
1.200
1.400
2006 2008 2010 2012 2014 2016 2018
DK Bankruptcies NO Bankruptcies
Last Observation: 2018M11
-5%
0%
5%
10%
2006 2008 2010 2012 2014 2016
NO Residential Building Costs
Last Observation: 2018M11
0%
1%
2%
3%
4%
5%
6%
7%
8%
9%
10%
2007 2009 2011 2013 2015 2017
NO Multi-Dwelling Building Costs NO Detatched House Building Costs
Last Observation: 2018M10 0%
1%
2%
3%
4%
5%
6%
7%
8%
2006 2008 2010 2012 2014 2016 2018
NO Construction Wage Index
Last Observation: 2018M9
Figure sources: Bloomberg Finance L.P. and Tryg Invest

20. 2019 Q120
Nordic currencies and interest rates
Nordic Currencies Interest rates (swaps), %, Denmark
Interest rates (swaps), %, Norway Interest rates (swaps), %, Sweden
0,60
0,70
0,80
0,90
1,00
1,10
2010 2012 2014 2016 2018
NOK/DKK SEK/DKK
-1,0%
-0,5%
0,0%
0,5%
1,0%
1,5%
2,0%
2,5%
3,0%
3,5%
4,0%
4,5%
2010 2012 2014 2016 2018
1yr 3yr 5yr 7yr 10yr
0,0%
0,5%
1,0%
1,5%
2,0%
2,5%
3,0%
3,5%
4,0%
4,5%
5,0%
2010 2012 2014 2016 2018
1yr 3yr 5yr 7yr 10yr
-1,0%
-0,5%
0,0%
0,5%
1,0%
1,5%
2,0%
2,5%
3,0%
3,5%
4,0%
4,5%
2010 2012 2014 2016 2018
1yr 3yr 5yr 7yr 10yr
Figure sources: Bloomberg Finance L.P. and Tryg Invest

21. 2019 Q121
Appendix

22. 2019 Q122
Bloomberg consensus table – GDP Growth
GDP growth 2018 2019 2020
US 2,90% 2,60% 1,90%
EU 1,90% 1,60% 1,50%
Japan 1,00% 1,00% 0,40%
France 1,60% 1,60% 1,50%
Germany 1,65% 1,60% 1,50%
United Kingdom 1,30% 1,50% 1,60%
Spain 2,50% 2,20% 1,90%
Italy 1,00% 0,90% 0,90%
China 6,60% 6,20% 6,00%
Brazil 1,30% 2,40% 2,50%
Russia 1,70% 1,50% 1,70%
India 7,50% 7,30% 7,50%
Denmark 1,80% 2,00% 1,70%
Norway 2,40% 2,30% 1,90%
Sweden 2,50% 2,13% 2,00%
Finland 2,65% 2,00% 1,00%
Consensus expectations
Figure sources: Bloomberg Finance L.P. and Tryg Invest

23. 2019 Q123
Bloomberg consensus table – Unemployment
Unemployment rate 2018 2019 2020
US 3,90% 3,60% 3,74%
EU 8,20% 7,90% 7,70%
Japan 2,40% 2,36% 2,36%
France 9,10% 8,75% 8,60%
Germany 5,20% 4,90% 4,80%
United Kingdom 4,10% 4,00% 4,10%
Spain 15,30% 13,95% 13,20%
Italy 10,60% 10,40% 10,10%
China 4,00% 4,00% 4,00%
Brazil 12,20% 11,51% 11,00%
Russia 4,80% 4,80% 4,85%
India ... ... ...
Denmark 4,00% 3,80% 4,80%
Norway 3,80% 3,45% 3,35%
Sweden 6,30% 6,30% 5,90%
Finland 8,00% 7,50% 7,20%
Consensus expectations
Figure sources: Bloomberg Finance L.P. and Tryg Invest

24. 2019 Q124
Bloomberg consensus table - Inflation
Inflation (CPI) 2018 2019 2020
US 2,50% 2,30% 2,22%
EU 1,80% 1,70% 1,70%
Japan 1,00% 1,10% 1,40%
France 2,10% 1,70% 1,50%
Germany 1,90% 1,80% 1,70%
United Kingdom 2,50% 2,10% 2,00%
Spain 1,80% 1,65% 1,60%
Italy 1,30% 1,40% 1,40%
China 2,20% 2,40% 2,20%
Brazil 3,71% 4,20% 4,10%
Russia 2,90% 4,80% 4,00%
India 4,30% 4,20% 4,74%
Denmark 1,00% 1,40% 1,60%
Norway 2,70% 2,10% 2,00%
Sweden 2,00% 2,10% 2,00%
Finland 1,25% 1,50% 1,80%
Consensus expectations
Figure sources: Bloomberg Finance L.P. and Tryg Invest

25. 2019 Q125
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