Emerging Markets Briefer - Danske Bank€¦ · FX outlook The PLN has been a clear underperformer since Donald Trump’s victory on 8 November, caused mainly by a global bond sell-off

Important disclosures and certifications are contained from page 18 of this report. www.danskeresearch.com

Investment Research

After years in the doldrums, emerging markets recorded a pretty good year in 2016. We

turned bullish in April, notably seeing a rebound in the Chinese construction sector. Despite

the Donald Trump-induced emerging market anxiety recently, the MSCI emerging markets

equity index has returned 25% since the slump in January 2016.

We see a murkier emerging markets outlook in 2017 (see table below). (1) We expect

rising US yields and USD to be difficult to swallow for emerging markets with large current

account deficits and/or USD debt: here Turkey stands out. Other countries topping our

currency vulnerability table are Egypt, Ecuador, Uruguay, the Philippines and Venezuela.

(2) Uncertainty on Trump’s trade and foreign policy is still great. (3) We expect China to see

a moderation in economic growth as stimulus measures start to fade – in our view, starting in

Q2 – hurting in particular Peru, Chile, and Brazil, the main metal suppliers to the Chinese

construction sector. Indeed, there are already symptoms of financial stress in Chinese financial

markets, although this may be isolated to the turn of year (but is still important to watch

carefully).

However, before we get too gloomy, it is important to note the following. (1) Emerging

markets have been through an almost non-stop external and internal adjustment since Ben

Bernanke mentioned the T-word in May 2013. (2) Policymaking is relatively orthodox in

many major emerging markets, notably Russia, Brazil, Mexico and even South Africa, where

the government has implemented three austerity packages in the past two years. Hence, despite

the pricing in of three further Fed rate hikes over the past month, the BRL and ZAR have

remained remarkably stable and RUB has strengthened against the USD (all in line with our

view). (3) Despite three Fed rate hikes next year, the Fed hiking cycle is still relatively gradual

compared with earlier hiking cycles. (4) The global economy is experiencing a strengthening

global recovery, aiding emerging markets (although protectionism could grease the wheel).

So, what is our advice on the emerging market space for 2017? Avoid a top-down

approach and be selective. Stay long Q1 and parts of Q2 (or until we see signs of a China

slowdown) and then become more cautious. We like the RUB (and oil producers with flexible

FX regimes) and CZK, while we think the CNY will continue to weaken against the USD.

We prefer HUF above PLN on a stronger economic outlook and external balances and less

policy uncertainty. This said, we wish you a Merry Christmas and a happy emerging market

investment New Year.

After a strong 2016, we are turning more cautious on emerging markets in 2017

Source: Danske Bank Markets

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

ChinaInfrastructure

slow

Fed one hike

Commodity prices

Geopolitical/

protectionism

risks

2016 2017

EM fundamentals

In

te

rn

al

Rebound in construction Construction sector slows

Two hikes in 2017Slow hiking cycle

Rebound in metal and oil pricesLeveling off with China

moderation

Falling inflation, monetary easing and rebound in external

demand

Tight monetary policy and

weak external demand

China slowing, increased

protectionism

Ex

te

rn

al

No significant trade protectionismTightening of US trade

regimeTrump administration signals tightening

19 December 2016

Emerging Markets Briefer A murky outlook for emerging markets in 2017

Chief Analyst, Head of Emerging Markets

Research

Jakob Ekholdt Christensen + 45 45 12 85 30 [email protected] Chief Analyst, Head of International Macro

Allan von Mehren +45 45 12 80 55 [email protected]

Senior Analyst Morten Helt +45 29 62 62 33 [email protected]

Senior Analyst Vladimir Miklashevsky +358 10 546 7522 [email protected]

Analyst Rokas Grajauskas +370 5 215 6231 [email protected]

First-year Analyst Aila Mihr [email protected]

Contents

Poland ......................................................................... 2 Hungary ...................................................................... 3 Czech Republic ...................................................... 4 Baltics ......................................................................... 5 Russia.......................................................................... 6 Turkey.......................................................................... 7 South Africa ........................................................... 8 Brazil ............................................................................ 9 China ......................................................................... 10 India ........................................................................... 11 Danske Bank Markets’ hedging recommendations: EMEA........................... 12 Danske Bank Markets’ hedging recommendations: other emerging markets ................................................................... 13 FX forecasts ......................................................... 14 Forecasts vs forwards .................................. 16 Monetary policy calendar ........................... 17

mailto:[email protected]






2 | 19 December 2016 www.danskeresearch.com

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Emerging Markets Briefer

Poland – zloty hit by global bond sell-off

Macro and political outlook

Recent economic indicators suggest a significant slowdown in the Polish economy over

the past couple of quarters. Real GDP grew only 2.5% y/y in Q3 16, with the slowdown

explained mainly by a contraction in construction activity due to low absorption of EU

funds, while low unemployment and a new child benefit payment support private

consumption growth. Short-term indicators point to subdued growth in Q4 as well:

industrial production slowed to 1.5% y/y in November, although private consumption

seems to be holding up relatively well (retail sales grew by 3.7% in November and

consumer confidence continues to hover at a record level). In light of the subdued economic

performance this year, we lower our 2016 real GDP forecast from 3.0% to 2.5%. Although

we expect a strengthening growth picture in 2017, due to greater absorption of EU funds

and stronger private consumption, we have lowered our GDP growth forecast to 2.9%

(previously 3.7%) slightly lower than consensus.

On a positive note, on 2 December, S&P upgraded its outlook from negative to stable,

while affirming its ‘BBB+’ rating. The rationale for the outlook upgrade was abating near-

term risks to Poland’s key institutions, notably central bank independence, while the

budgetary position is also holding up quite well despite weaker-than-expected growth, due

to government efforts to strengthen tax compliance.

Monetary policy outlook

The National Bank of Poland’s (NBP) monetary policy committee kept the policy rate

unchanged at 1.5% at its 7 December meeting. The central bank sounded relatively neutral

on the outlook, stressing it expects inflation to rise to its target by end-2017 due to

strengthening economic growth and increasing commodity prices. The market currently

expects no rate hikes in 2017. We agree with that view for H1 17 but think that a rate hike

could be considered in H2 17.

FX outlook

The PLN has been a clear underperformer since Donald Trump’s victory on 8

November, caused mainly by a global bond sell-off amid thin liquidity in the PLN

market. Although our short-term model points to the EUR/PLN being overbought with

a fair value of 4.39, we remain cautious in the short-term due to the relative hawkish

Fed and higher US yields. Longer term, the PLN appears to be undervalued. Our new

forecasts for the EUR/PLN are 4.40, 4.35, and 4.30 in 3M, 6M and 12M, respectively.

Risk factors

The biggest upside risk to our EUR/PLN forecasts is a further rise in global yields on

faster-than-expected global reflation and hawkish fed. Stronger Polish growth could

lead to a stronger PLN, as a rate hike would become more likely. Further, falling global

yields would also be PLN positive.

Economy operating close to full

potential...

...but markets are not pricing in any

NBP rate hikes.

Source: Macrobond Financial Source: Macrobond Financial

PLN

Credit rating:

S&P: BBB+ (stable)

Currency regime:

Free float (freely convertible)

Inflation target:

2.5% +/-1pp

Macro forecasts

Source: Macrobond Financial, Danske Bank

Markets

Interest rate forecast


FX forecasts


Danske Concensus Danske Concensus

2015 3.9 3.9 -0.9 -0.9

2016 2.5 2.8 -0.6 -0.6

2017 2.9 3.2 1.8 1.4

2018 3.2 3.4 2.0 1.8

GDP Inflation

Policy rate

Next meeting

Next change +25bp Q3 2017

End-2017

National Bank of Poland (NBP)1.50

11/01/2017

1.75

Danske Forward

15-Dec 4.43

+3M 4.40 4.45

+6M 4.35 4.47

+12M 4.30 4.51

Danske Forward

15-Dec 4.25

+3M 4.23 4.24

+6M 4.03 4.25

+12M 3.84 4.24

EUR/PLN

USD/PLN


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Hungary – strong underlying economic outlook

Macro outlook

The Hungarian economy saw a temporary growth slowdown in Q3, due mainly to a fall

in absorption of EU structural funds. Real GDP grew by 0.3% q/q in Q3, implying annual

growth of 2.2%. However, PMI remains strong (56.6 in November) driven primarily by

a surge in new orders. Given the weak Q3 number, we lower our real GDP growth forecast

for 2016 somewhat, from 2.0% to 1.5%. In 2017, we expect economic growth to be

boosted by increasing absorption of EU funds supporting investment, stronger private

consumption and an increase in public consumption ahead of the general election in 2018.

Hence, we see the economy rebounding, recording 3.2% growth in 2017 (a bit lower than

our previous forecast of 3.8% but still significantly above consensus of 2.6%).

The underlying fiscal performance has been strong as tax collection continues to be robust

due to soaring corporate taxes and social security contributions. At the same time,

expenditure has fallen significantly, helped by declining interest payments and lower

spending related to EU funds. We expect the 2016 deficit to amount to around 1% of GDP,

significantly below the 3% of GDP EU benchmark. This provides room for significant

fiscal loosening in 2017, which would raise the budget deficit slightly to 1.5% of GDP.


The National Bank of Hungary (NBH) continues to pursue monetary expansion to raise

inflation. On 11 November, it kept its base rate constant at 0.9%. Deflation pressure

should continue to abate, with higher commodity prices and a pickup in economic

growth. Both headline and core inflation edged slightly higher in November to 1.1%

and 1.5% y/y, respectively. With global reflation spilling over to Hungary, we think the

NBH will start considering raising rates from mid-2017.

FX outlook

The HUF has been a victim of the Trump-related global bond sell-off. Given we expect the

bond sell-off to take a breather, we think EUR/HUF will strengthen modestly as the

currency is fundamentally undervalued according to our short-term financial model

(EUR/HUF estimate at 311.5) and economic growth in the Hungarian economy is

strengthening. As a result, our forecast for EUR/HUF is 310 in 3M, strengthening to 308

on a 6-12M horizon.

Risk factors

The biggest risk to our forecasts is a further increase in US yields, including from a

more hawkish Fed. The HUF may get support from stronger-than-expected growth and

inflation developments, raising expectations of monetary policy tightening.

Twin deficits have been corrected An undervalued HUF brings record

current account surpluses


HUF

Credit rating:

S&P: BBB- (stable)

Currency regime:


Inflation target:

3% (medium term)



Macro forecasts


Markets

FX forecasts


Policy rate

Next meeting


End-2017 1.05

0.90

20/12/2016

Hungarian Central Bank (MNB)

2015 2016 2017 2018

GDP (% y/y) 2.9 1.5 3.2 3.2

CPI (% y/y) 0.1 1.3 2.3 2.4

Danske Forward

15-Dec 312.8

+3M 310.0 312.8

+6M 308.0 313.2

+12M 308.0 314.1

Danske Forward

15-Dec 300.33

+3M 298.08 298.52

+6M 285.19 297.50

+12M 275.00 295.18

EUR/HUF

USD/HUF


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Czech Republic – prepare for EUR/CZK floor removal

Macro and political outlook

The Czech economy’s growth decelerated to 1.9% y/y in Q3 16, caused by weaker net

exports due to subdued foreign demand. Compared with an economic expansion of

4.6% in 2015, growth this year has slowed, due mainly to a temporary decline in

investment co-financed from EU funds. Unemployment fell further to 4.9% in

November, its lowest level since December 2008. Accelerating wage growth and rising

inflation (1.5% y/y in November) provide support for the Czech National Bank’s (CNB)

plan to exit the EUR/CZK floor in mid-2017, once inflation has reached the 2% target

sustainably. We think the Czech economy will continue to grow at similar rates next

year. While higher inflation and less room for further improvement in the labour market

could weigh on growth, we expect these factors to be offset by higher government

spending ahead of the 2017 legislative elections, with continuing wage growth

supporting household demand.


At its monetary policy meeting on 3 November, the CNB kept its policy rate unchanged

at 0.05% and reiterated that it expects the EUR/CZK floor to remain in place until mid-

2017. The CNB forecasts market interest rates will be flat at their current level until

mid-2017 and increase thereafter, followed by a further modest rise in 2018. Hence, we

expect it to stay on hold at least until H2 17, when it might raise rates, depending on

the financial and economic repercussions from the exchange rate floor exit.

FX outlook

Following the US presidential election, EUR/CZK rose by more than 0.2%, hitting

27.112, its weakest level since early July, as the cross came under pressure from

weakening emerging market sentiment along with other eastern European currencies.

However, with the strong November inflation numbers the cross has stabilised and is

now trading again close to the CNB’s floor. After the CNB exit, we expect a significant

fall in EUR/CZK, due to the fundamental CZK undervaluation from a REER point of

view. We project the cross to settle in the 25.5-26.0 range (see FX Strategy: Prepare

for a lifting of the EUR/CZK floor, 24 October 2016).

Risk factors

The biggest risk to our forecasts is that domestic inflation developments could

disappoint on the downside, causing the CNB to push its exit date further out into the

future. On the other hand, stronger-than-expected inflation prints could induce the CNB

to move its exit forward to Q2 17. Furthermore, its high degree of openness makes the

Czech economy vulnerable to protectionist tendencies in the US and political risks in

Europe, which could weigh on economic growth and the CZK.

Tighter labour market increases

inflation pressures, triggering CNB exit

Fundamental CZK undervaluation

relative to the long-run REER trend

Source: Macrobond Financial, Danske Bank Source: Macrobond Financial, Danske Bank

CZK

Credit rating:

S&P: AA- (stable)

Currency regime:

Pegged exchange rate to EUR (27

CZK to the EUR)

Inflation target:

2% +/-1pp

Macro forecasts



Source: Danske Bank

FX forecasts


2015 2016 2017 2018

GDP (% y/y) 4.6 2.5 2.7 2.7

GDP deflator (% y/y) 1.0 1.3 1.9 1.9

CPI (% y/y) 0.3 0.7 2.0 2.1

Private consumption (% y/y) 3.1 2.8 3.1 2.7

Fixed investments (% y/y) 9.1 -1.1 3.4 2.7

Unemployment (%) 6.2 4.9 4.9 4.8

Current account (% of GDP) 0.9 1.6 1.0 0.6

Policy rate

Next meeting


End-2017 0.55

Czech National Bank (CNB)0.05

22/12/2016

Danske Forward

15-Dec 27.02

+3M 27.00 26.91

+6M 27.00 26.80

+12M 25.50 26.62

Danske Forward

15-Dec 25.94

+3M 25.96 25.68

+6M 25.00 25.46

+12M 22.77 25.02

EUR/CZK

USD/CZK

http://danskeanalyse.danskebank.dk/abo/FXStrategyEURCZK241016/$file/FXStrategy_EURCZK_241016.pdf



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Baltics – investment pushing down growth

If slower growth in 2015 was primarily caused by a contraction in exports to Russia

and other CIS countries, in 2016 the key factor driving down growth is a sharp fall in

investment, which is caused by the overlap of two EU financing periods. A pickup in

investment in 2017 should ensure that growth in the Baltic states accelerates, although

it is still set to remain far from the pre-crisis level.

Estonia

The Estonian economy expanded by 1.3% y/y in Q3 16 and this was consistent with the

general trend in 2016. The key factor that brought down growth was fixed investment,

which contracted by 8.4%.

Private consumption grew by 3.9% and was facilitated by rapid wage growth (+7.0%

y/y). Exports have rebounded lately (+5.6% y/y in Q3), primarily driven by the strong

performance of services as well as electrical equipment.

Latvia

The Latvian economy demonstrated the weakest growth rate among the Baltics in Q3

16, at a mere 0.3% y/y. The key reason pushing down growth was a very strong

contraction in investment (-26.4%), which almost matches the fall in investment

witnessed during the 2008-09 crisis.

Despite somewhat slower wage growth (+2.2%), private consumption expanded by a

healthy 3.2% y/y as consumers drew on their savings. Exports also demonstrated strong

performance, growing by 2.4% y/y and being primarily driven by pharmaceuticals and

grain exports.

Lithuania

Lithuania continues to demonstrate the most robust economic performance among the

Baltic states. Its GDP expanded by 1.7% y/y in Q3 16. This is despite negative

investment growth (-5.1%) and negative inventory change, which has been weighing

negatively on growth since the end of 2015.

Due to strong wage growth (+7.9%), private consumption expanded by 5.7% in Q3.

Export growth has slowed down to 1.2% y/y in Q3. Key categories to have declined

were grain, fertilisers and oil products, while services continue to expand at a robust

rate (+11.3% in Q3).

Weak economic growth persists

Source: European Commission, Macrobond Financial

Estonia

Credit rating: S&P: AA- (stable)

Currency: EUR since 1 Jan 2011

Source: Danske Bank Markets estimates

Latvia

Credit rating: S&P: A- (stable)



Markets estimates

Lithuania

Credit rating: S&P: A- (stable)



Markets estimates

2015 2016 2017 2018

GDP (% y/y) 1.4 1.2 2.1 2.4

HICP inflation (% y/y) 0.1 0.8 2.0 1.8


Fixed investment (% y/y) -5.8 -0.9 3.9 3.3

Exports (% y/y) -1.5 3.1 2.6 2.8

Gross wage growth (% y/y) 6.1 7.1 6.4 6.2

Unemployment (%) 6.1 6.9 7.2 7.4

2015 2016 2017 2018

GDP (% y/y) 2.7 1.7 2.8 2.7

HICP inflation (% y/y) 0.2 0.0 2.1 1.9


Fixed investment (% y/y) 2.1 -18.9 7.1 4.9

Exports (% y/y) 1.8 2.0 2.8 2.7


Unemployment (%) 9.9 9.7 9.2 8.7

2015 2016 2017 2018

GDP (% y/y) 1.8 2.1 3.1 3.0

HICP inflation (% y/y) -0.7 0.6 2.2 2.0


Fixed investment (% y/y) 10.3 -2.2 6.9 5.5

Exports (% y/y) 1.2 3.4 3.2 3.0


Unemployment (%) 9.1 8.0 7.3 6.9


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Russia – optimistic for 2017

Macro outlook

Russia’s GDP shrank 0.4% y/y in Q3 16 versus a 0.6% y/y fall in Q2 16, shrinking

0.7% y/y in 9M 16. The agricultural sector continued to expand, growing 3.2% y/y in

Q3 16 and 2.6% y/y in 9M 16. A similar trend occurred in mining and quarrying. The

negative news in Q3 16 came from manufacturing (-1.2% y/y), construction (-2.9% y/y)

and retail and wholesale (-3.0% y/y).

Preliminary seasonally adjusted data for October shows 0.0% m/m GDP growth. We

keep our GDP growth forecasts at -0.6% y/y for 2016 and 1.2% y/y for 2017. We expect

Russia’s economy to expand 1.4% y/y in 2018 on Brent crude staying over USD60/bl,

further monetary easing and recovering private consumption.

The demand side is still in negative territory, while real wage growth is anchoring

slightly above zero. Low unemployment and ongoing disinflation are set to support the

private consumer over 2017. We see consumer demand turning positive in early 2017

helped by a strengthening RUB.

FX and monetary policy outlook

On 16 December, Russia’s central bank (CBR) kept its key rate at 10.0%, in line with

consensus and our expectation. We consider the CBR’s stance is traditionally moderately

hawkish. Yet, the governor’s message has been clear and consistent. While since October

2016 we have been expecting the next cut to occur in Q2 17 and the CBR’s statement now

mentions H1 17, during the press conference’s Q&A the CBR’s governor Elvira Nabiullina

mentioned ‘rather Q2 17’.

Inflation fell from 6.1% y/y in October to 5.6% y/y as of 12 December 2016. Given a

stabilisation in crude prices and balanced RUB exchange rate, our model signals that

the CBR will reach its 4% y/y inflation target by the end-2017, which would allow a

gradual cut in the key rate to 7.00% by December 2017.

We continue to be moderately bullish on the RUB in the short, mid- and long term, as

it has been supported significantly by the pledge of the Organisation of Petroleum

Exporting Countries (OPEC) and non-OPEC economies to cut oil production, while the

Fed’s hawkish stance is restraining the RUB’s excessive rally.

Risk factors

Downside risks for the RUB include the Fed hiking more than three times in 2017 as

the recent dots suggest. We do not expect the revoking of sanctions. An escalation of

geopolitical issues and a tumbling oil price are downside risks to our GDP growth

forecasts.

Macro indicators continue to recover Real wage growth is rebounding

Source: Macrobond Financial, DBM Source: Macrobond Financial, DBM

RUB

Credit rating:

S&P: BB+ (stable)

Currency regime:

Free float

Inflation target:

4% by the end of 2017

Macro forecasts

Source: CBR, Rosstat, Bloomberg, Macrobond

Financial, Danske Bank Markets estimates



FX forecasts


2014 2015 2016E 2017E 2018E

Real GDP (% y/y) 0.6 -3.7 -0.6 1.2 1.4

Private consumption, real (% y/y) 1.3 -10.1 -4.5 2.0 2.3

Fixed investments, real (% y/y) -2.0 -7.6 -6.0 2.8 3.0Brent oil price (USD, average) 99.5 53.6 48.6 52.3 56.5

Brent oil price (% y/y) -8.5 -46.1 -9.3 7.5 8.2

Exports in USD (% y/y) -4.9 -31.8 -26.0 6.2 7.0

Imports in USD (% y/y) -9.8 -37.0 -11.0 1.0 10.0

MosPrime 3 months rate (% average) 10.5 13.3 11.1 8.0 7.0

CPI (% Dec/Dec) 11.4 12.9 5.5 4.0 3.7

Unemployment (%) 5.2 5.6 5.6 5.3 5.2

Budget balance (% of GDP) 0.9 -2.4 -3.4 -3.0 -2.7

Current account (% of GDP) 3.2 4.0 3.2 3.0 3.2

Policy rate

Next meeting

Next change -50bp Q2 2017

End-2017 7.00

Bank of Russia (CBR)

03/02/2017

10.00

Danske Forward

15-Dec 64.45

+3M 62.40 65.70

+6M 60.70 67.21

+12M 59.58 70.13

Danske Forward

15-Dec 61.87

+3M 60.00 62.71

+6M 56.20 63.84

+12M 53.20 65.90

EUR/RUB

USD/RUB


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Turkey – hit by perfect storm

Macro outlook

Turkey’s GDP growth surprisingly turned negative, shrinking 1.8% y/y in Q3 16 versus

a 3.1% y/y expansion in Q2 16, as the agricultural sector fell 7.7% y/y, industrial

production dropped 1.4% y/y and private consumption decreased 3.2% y/y. We

continue to keep our 2.7% y/y GDP growth forecast for 2016 unchanged, staying under

consensus, which is declining from month to month (current 3.0% y/y). We expect the

GDP to grow 2.3% y/y in 2017 and 1.8% y/y in 2018, as accelerating inflation should

weigh on private consumption and rates remain high, depressing fixed investments

growth.

Fitch is the only major rating agency that is keeping Turkey at investment grade and it

is set to review its assessment of Turkey in early 2017. The assessment will be an

important event for Turkish economic prospects in 2017.

The current account balance remains in negative territory, posting a USD1.7bn deficit

in October. Furthermore, an increasing oil price and lack of strong recovery in exports

are weighing on the current account balance in the long term. We expect the current

account deficit to expand to around 5% of GDP in 2016, from 4.5% in 2015.

FX and monetary policy outlook

A delayed and rather timid reaction by Turkey’s central bank (TCMB) to the drop in

TRY has not helped the lira. The TCMB made an emergency rate hike by 50bp to 8.0%

(one week repo rate) on 24 November 2016 and promised to keep its monetary policy

cautious.

While our model shows that the TRY is oversold currently, negative sentiment is

weighing significantly on the currency. Due to a more hawkish than expected Fed in

December 2016, rising oil price prospects following the pledge of the Organisation of

Petroleum Exporting Countries (OPEC) and non-OPEC economies to cut oil production

weighing on the current account deficit, we raise our USD/TRY pair forecast to 3.50 in

1M (previously 3.40) on TRY buybacks, 3.60 in 3M and 6M (previously 3.30 and 3.30,

respectively) and 3.95 in 12M (previously 3.45).

Risk factors

Risks for Turkey’s economy relate to unexpected moves by President Recep Tayyip

Erdoğan in internal politics, the negotiations with the EU, rate hikes, the Fed’s

increasing hawkishness, oil price increases and a deterioration of the geopolitical

situation.

Turkey’s GDP growth slows down Current account deficit to expand on

rising oil price


TRY

Credit rating:

S&P: BB (stable)

Currency regime:

Free float

Inflation target:

5.0%±2pp year-end 2016-18

Macro forecasts

Source: Bloomberg, Danske Bank Markets

Interest rate forecasts


FX forecasts


Markets

2014 2015 2016E 2017E 2018E

Real GDP (% y/y) 2.9 3.9 2.7 2.3 1.8

Private consumption, real (% 1.3 3.6 3.0 2.1 1.5Fixed investments, real (% y/y) -1.0 3.8 3.0 1.9 1.6CPI (% Dec/Dec) 8.9 8.8 7.6 9.0 8.2Unemployment (%) 10.4 10.3 10.3 10.2 10.0Current account (% of GDP) -5.4 -4.5 -5.0 -5.5 -4.5

Policy rate

Next meeting

Next change Unchanged 2017

End-2017 8.00

20/12/2016

C.B. of the Republic of Turkey (TCMB)8.00

Danske Forward

15-Dec 3.67

+3M 3.74 3.74

+6M 3.89 3.85

+12M 4.42 4.08

Danske Forward

15-Dec 3.53

+3M 3.60 3.57

+6M 3.60 3.66

+12M 3.95 3.83

EUR/TRY

USD/TRY


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South Africa – a resilient rand

Macro outlook

South Africa continues to struggle with the aftermath of the collapse in commodity

prices. Real GDP growth amounted to 0.7% y/y in Q3 16, the same level as in Q2. The

major sectors causing the modest growth are mining, government sector and finance,

while the manufacturing sector and utilities are contracting. Indicators in Q4 point to

continued subdued growth, as PMI and business confidence are still at low levels. We

maintain our economic forecast, projecting real GDP will slow to 0.5% in 2016 and

recover to 1.3% in 2017. Despite the low growth, South Africa continues to suffer from

a relatively large current account deficit, amounting to 4.1% of GDP in Q3 16 versus

3.1% of GDP in Q2.

Over the past quarter, Finance Minister Pravin Gordhan seems to have been on a

stronger footing in the government, drawing up a fairly strong medium-term fiscal plan

(although it lacks structural reforms to strengthen the growth outlook). The rating

agencies have so far maintained an investment-grade rating as we predicted, despite

significant market fears of a reduction of the rating to junk. However, South Africa is

not out of the woods yet and continues to be at risk of a downgrade if reforms are not

implemented as stated by the government.


The South African Reserve Bank (SARB) has kept its benchmark repo rate unchanged

at 7% since March. Over the same period, CPI inflation has declined to the upper part

of SARB’s inflation band. If the ZAR remains relatively stable (our base case), the idle

capacity in the economy should reduce inflation pressure further. Hence, we expect

SARB to remain on hold for the time being but to begin an easing cycle at some stage

in H1 17, provided inflation falls safely into the target band.

FX outlook

The ZAR has remained remarkably stable over the past three months (in line with our

view), even with a strengthening USD and sharply rising US yields. On the domestic

front, we believe South Africa will continue to muddle through and avoid a downgrade

in H1 17 and externally that the Fed will hike rates twice in 2017. Furthermore, the

ZAR is significantly undervalued at the current level. As a result, we expect USD/ZAR

to weaken a bit to 14.4 in 3M, 14.6 in 6M and 14.8 in 12M. However, if South Africa

is downgraded to Junk, we believe the ZAR would lose around 10%.

Inflation above SARB upper range. The ZAR is still in undervalued

territory despite recent gains.


ZAR

Credit rating:

S&P: BBB- (negative)

Currency regime:


Inflation target:

3-6%

Macro forecasts




FX forecasts


Markets

2015 2016 2017 2018

GDP (% y/y) 1.3 0.5 1.3 2.1

GDP deflator (% y/y) 4.0 6.8 6.5 6.6

CPI (% y/y) 4.5 6.5 6.3 6.4


Fixed investments (% y/y) 1.4 0.9 0.9 1.7

Unemployment (%) 24.5 27.4 28.1 28.4

Current account (% of GDP) -5.8 -5.1 -5.0 -4.7

Policy rate

Next meeting


End-2017 6.50

South African Reserve Bank (SARB)7.00

24/01/2017

Danske Forward

15-Dec 14.59

+3M 14.98 14.84

+6M 15.77 15.18

+12M 16.58 15.85

Danske Forward

15-Dec 14.00

+3M 14.40 14.17

+6M 14.60 14.42

+12M 14.80 14.90

EUR/ZAR

USD/ZAR


Em

erging M

arke

ts Briefer


Brazil – reform efforts moving along

Macro outlook

There are tentative signs that the recession in the Brazilian economy is abating. Real

GDP fell by 2.9% y/y in Q2 (slightly better than consensus) versus a fall of 3.8% y/y in

Q1. However, short-term indicators point to an economy that is continuing to struggle.

The annual decline in retail sales and industrial production deepened in October relative

to September. While we maintain our real GDP growth forecast of -3.5% for 2016, we

lower our forecast for 2017 to 0.5%, significantly below consensus of 1.0%.

The new government, led by Vice-President Michel Temer, has started to implement a

fiscal adjustment programme aimed at improving public finances and reinvigorating

economic growth. The first priority is implementing a fiscal spending cap, which was

approved by the senate on 13 December. The next step is social security reform.

Furthermore, the government is embarking on a privatisation programme. The

implementation of these additional measures will be challenging for the government

amid anti-austerity protests and plummeting approval ratings for President Temer.


New central bank governor Ilan Goldfajn, who was sworn in as Brazil’s central bank

president in June, has come across as a hawk. Amid falling inflation and government

commitment to more prudent fiscal policy, the central bank (BCB) has lowered its

leading Selic rate by a total of 50bp over the past two meetings. We think the easing

cycle will continue, albeit at a slower and more cautious pace, amid increasing political

risks. Hence, we think the central bank will lower the rate by a further 25bp in January.

FX outlook

The BRL weakened somewhat on the back of Trump’s victory in the US presidential

elections but in recent weeks has recovered some ground. We see prospects of further

strengthening near term on account of higher commodity prices, solid metal demand

from China, improving external balances and a slightly undervalued BRL. However,

from around mid-2017, we expect USD/BRL to face upward pressure from a slowdown

in the Chinese economy and weakening commodity prices. As a result, our USD/BRL

forecast is 3.3 in 3M, 3.4 in 6M and 3.6 in 12M. This is somewhat more bullish than

market expectations. The most important negative risks are the failure to pass fiscal

consolidation measures, a more hawkish than expected Fed and heavy trade restrictions

by the Trump administration.

Metal prices and BRL have diverged

lately (due to Trump)…

...while strong external balances should

support BRL


BRL

Credit rating:

S&P: BB (negative)

Currency regime:

Free float (non-convertible)

Inflation target:

4.5% +/- 2% points

Macro forecasts


FX forecasts


Markets

Interest rate forecasts


Danske Consensus Danske Consensus

2015 -3.8 -3.8 9.0 9.0

2016 -3.5 -3.5 8.0 8.8

2017 0.5 1.0 5.0 5.6

GDP Inflation

Danske Forward

15-Dec 3.53

+3M 3.43 3.61

+6M 3.67 3.71

+12M 4.03 3.90

Danske Forward

15-Dec 3.39

+3M 3.30 3.45

+6M 3.40 3.53

+12M 3.60 3.67

EUR/BRL

USD/BRL

Policy rate

Next meeting

Next change -25bp Jan 2017

End-2017

13.75

11/01/2017

13.25

Central Bank of Brazil (BCB)


Em

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China – moderation in growth in 2017

Macro outlook

According to official statistics, the Chinese economy stayed stable at 6.7% y/y in the

first three quarters of 2016. However, other indicators such as PMI manufacturing and

electrical production point to a clear recovery during 2016. The lift to activity is driven

by a stronger housing market and a boost in infrastructure spending. Exports have also

seen stronger growth.

We expect the two engines, housing and infrastructure, to stay strong in the short term.

Despite a tightening towards housing, home sales are still quite strong. However, during

2017 we look for moderation in growth. First, home sales are expected to moderate as

tightening starts to kick in. Second, the lift to infrastructure investments looks set to

fade in 2017. Exports will serve as a cushion, as they benefit from a 10% y/y weakening

of the trade weighted CNY and a recovery in the US economy. The Chinese

government’s growth target for 2016 is 6.5-7%. Our forecast for GDP growth is

unchanged at 6.7% for 2016 and 6.6% for 2017. In 2018, we expect growth to slow

further to 6.3%.

China continues to face medium-term challenges from a rapid build-up of debt in the

corporate sector, overcapacity in some sectors and a difficult rebalancing of growth

from industry to services. China needs to slow down the build-up of debt sooner or

later. For now, we believe the government has the tools to deal with the financial risks.

However, a need for deleveraging is set to dampen the medium-term growth potential.

We also see a 50% risk that China will face a financial crisis within five years.


Monetary policy is expected to be on hold through Q2, while we expect a 25bp cut. On

the one hand, inflationary pressures have started to increase, pointing to higher rates.

However, inflation ex food is still only at 1.8%, far from the target of 3%. A very high

debt level also increases the need for low rates to keep debt servicing costs down. In

addition, many regions are still suffering from a big oversupply of houses and others

from sectors with overcapacity. A blunt tool like the interest rate is thus unlikely to be

used to dampen growth. Instead, fiscal policy as well as regional changes to housing

regulation are likely to be used to fine-tune growth.

FX outlook

China saw significant CNY selling pressure in January but managed to stabilise

outflows by pushing up offshore (CNH) money market rates. Better economic data has

also kept markets calm since then. During the autumn, the CNY weakened again against

the USD. This mainly reflects a stronger USD, though, as the CNY is stronger versus

the EUR. Capital outflows have picked up lately and we see a clear risk of another bout

of strong outflows and uncertainty at some point in 2017 when growth starts to slow.

We look for a move in USD/CNY towards 7.3 +12M versus the USD.

Pressure on CNY has eased Chinese economy recovered in 2016


CNY

Credit rating:

S&P: AA- (negative)

Currency regime:

Managed exchange rate versus

basket

Inflation target:

3.0% for 2016

Macro forecasts




FX forecasts


Markets

Danske Consensus Danske Consensus

2016 6.7 6.9 2.0 1.4

2017 6.6 6.5 2.1 2.1

2018 6.3 6.1 2.3 2.1

GDP Inflation

Policy rate

Next meeting


End-2017 4.10

4.35

People's Bank of China (PBOC)

Not announced

Danske Forward

15-Dec 7.23

+3M 7.38 7.29

+6M 7.78 7.34

+12M 8.18 7.44

Danske Forward

15-Dec 6.94

+3M 7.10 6.96

+6M 7.20 6.97

+12M 7.30 6.99

EUR/CNY

USD/CNY


Em

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arke

ts Briefer


India – signs of recovery

Macro outlook

India’s GDP growth was 7.3% y/y in Q3 according to the national statistics. However,

this is likely too good to be true as most other data point to much slower growth.

Nevertheless, the recent indicators for the Indian economy have shown some positive

signs of stronger growth: both exports and imports have recovered in recent months,

showing the highest growth in two years and car sales have trended up this year after

being been broadly flat from 2011 to 2015. Industrial production growth is still weak,

though, with the latest data hovering around 0%.

India is likely benefitting from the global recovery seen during 2016, with China

rebounding from Q1 and the US and euro area joining the rebound in H2.

India’s external balance is fairly robust, as the current account deficit has declined over

the past two years to close at 1% of GDP – partly a reflection of better terms of trade

due to the big decline in the price of commodity imports. This may reverse a bit as

commodity prices have increased, but the overall balance should stay fairly sound. The

fiscal deficit is still too high at around 7% of GDP.


Reserve Bank of India (RBI) cut rates further in September, as falling inflation left

room for further easing. RBI is targeting consumer price inflation within 4% +/-2%.

Inflation in November fell more than expected to 3.6% y/y from 4.2% y/y and is thus

comfortably below the target. It is also below RBI’s own inflation forecast. We look for

India to cut rates further in February by 25bp. In late August, it was announced that Urjit

Patel would become the new governor of RBI, replacing Raghuam Rajan. He took office

on 4 September. However, as he has similar views as Rajan and served as RBI deputy

governor since January 2013, policy continuity is expected.

FX outlook

The change of governor had little impact on the INR, which has continued the broadly

sideways move against the USD this year, as EM sentiment has been robust and the Fed

has been on the dovish side. However, the medium-term trend is still expected to be a

gradual weakening of the INR, as inflation is running above the US and Reserve Bank

of India has an easing bias, whereas the Fed is tightening policy. We look for a move

in USD/INR to 68.5 +3M, 69.0 +6M and 70 +12M.

Inflation below target should pave the

way for another rate cut in February

INR sideways but long-term trend is still

for gradual weakening


Markets


Markets

INR

Credit rating:

S&P: BBB- (stable)

Currency regime:

Free float

Inflation target:

4% with +/- 2% range

Macro forecasts

Source: Danske Bank Markets, Bloomberg



FX forecasts

Source: Macrobond Financial, Danske Bank Markets

Danske Bank

Consensus

Danske Bank

Consensus

2016 7.3 7.2 4.5 5.2

2017 7.3 7.3 4.0 4.8

2018 7.3 7.6 4.0 5.0

GDP Inflation

Policy rate

Next meeting

Next change -25bp February 2017

End-2017

08/02/2017

6.25

Reserve Bank of India (RBI)

6.00

Danske Forward

15-Dec 70.68

+3M 71.24 71.37

+6M 74.52 72.53

+12M 78.40 74.79

Danske Forward

15-Dec 67.85

+3M 68.50 68.12

+6M 69.00 68.90

+12M 70.00 70.28

USD/INR

EUR/INR


Em

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ts Briefer


Danske Bank Markets’ hedging recommendations: EMEA

Currency Instrument

Forecast Income Expenses

PLN

We recommend hedging PLN income via knock-in forwards.

We recommend hedging PLN expenses with a risk-reversal strategy.

Price indicators

Currency Instrument


RUB

We recommend hedging RUB-income via knock-in forwards.

We recommend hedging RUB expenses via FX forwards.

Price indicators

Currency Instrument


HUF

We recommend hedging HUF-income via knock-in forwards.

We recommend hedging HUF-expenses via risk-reversal strategies.

Price indicators

Currency Instrument


CZK

We recommend hedging CZK income via risk-reversals.

We expect EUR/CZK to decline considerably once the CNB abandons the EUR/CZK floor in the second half of 2017. Therefore, we recommend EUR- and DKK-based corporate clients hedge CZK payables to increase the hedge ratio and duration on CZK hedges via FX forwards. See FX Strategy: Prepare for a

lifting of the EUR/CZK floor (24 October) for details.

Price indicators


1M 3M 6M 12M

DB forecast 4.42 4.40 4.35 4.30

Forward 4.42 4.44 4.46 4.51

Cons. forecast 4.42 4.44 4.37 3.53

3.25

3.50

3.75

4.00

4.25

4.50

Dec/14 Aug/15 Apr/16 Jan/17 Sep/17

EUR/PLN DB forecastForward Cons. forecast

Implied volatility

Risk reversal (PLN seller)

Forward rate (PLN seller)

cheap neutral expensive

1M 3M 6M 12M

DB forecast 62.32 62.40 60.70 59.58

Forward 64.85 65.82 67.33 70.26

Cons. forecast 69.18 68.02 67.17 68.71

40.0

50.0

60.0

70.0

80.0

90.0


EUR/RUB DB forecastForward Cons. forecast

Implied volatility

Risk reversal (RUB seller)

Forward rate (RUB seller)


1M 3M 6M 12M

DB forecast 312.00 310.00 308.00 308.00

Forward 312.65 313.03 313.66 315.02

Cons. forecast 311.64 312.65 309.50 263.30

200

300


EUR/HUF DB forecastForward Cons. forecast

Implied volatility

Risk reversal (HUF seller)

Forward rate (HUF seller)


1M 3M 6M 12M

DB forecast 27.00 27.00 27.00 25.50

Forward 26.97 26.96 26.89 26.71

Cons. forecast 27.01 26.98 26.52 22.68

20.0

22.0

24.0

26.0

28.0


EUR/CZK DB forecastForward Cons. forecast

Implied volatility

Risk reversal (CZK seller)

Forward rate (CZK seller)





Em

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ts Briefer


Danske Bank Markets’ hedging recommendations: other emerging markets

Currency Instrument


CNH

We recommend hedging CNH-income via FX forwards.

We recommend hedging CNY payables via a risk-reversal strategy.

Price indicators

Currency Instrument


ZAR

Hedge ZAR income via FX forwards. We recommend hedging ZAR expenses via knock-in forwards.

Price indicators

Currency Instrument


TRY

Hedge TRY income via FX forwards. We recommend hedging TRY expenses via knock-in forwards.

Price indicators


1M 3M 6M 12M

DB forecast 7.14 7.38 7.78 8.18

Forward 7.33 7.42 7.53 7.74

Cons. forecast 7.38 7.36 7.33 7.57

6.00

6.50

7.00

7.50

8.00

8.50


EUR/CNH DB forecastForward Cons. forecast

Implied volatility

Risk reversal (CNH seller)

Forward rate (CNH seller)


1M 3M 6M 12M

DB forecast 14.54 14.98 15.77 16.58

Forward 14.69 14.89 15.22 15.91

Cons. forecast 15.27 15.23 15.37 16.00

10.0

12.0

14.0

16.0

18.0


EUR/ZAR DB forecastForward Cons. forecast

Implied volatility

Risk reversal (ZAR seller)

Forward rate (ZAR seller)


1M 3M 6M 12M

DB forecast 3.57 3.74 3.89 4.42

Forward 3.69 3.75 3.85 4.08

Cons. forecast 3.52 3.56 3.60 3.73

2.00

2.50

3.00

3.50

4.00

4.50


EUR/TRY DB forecastForward Cons. forecast

Implied volatility

Risk reversal (TRY seller)

Forward rate (TRY seller)



Em

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ts Briefer


FX forecasts

Core – major


Wider CEE


CIS


MEA


Danske Forward Danske Forward Danske Forward Danske Forward Danske Forward

15-Dec 1.04 743.4 978.2 902.8

+3M 1.04 1.05 743.8 743.0 970.0 977.3 910.0 906.2

+6M 1.08 1.05 744.3 742.6 940.0 976.3 900.0 909.6

+12M 1.12 1.06 744.3 741.8 930.0 976.3 880.0 916.6

15-Dec 1.04 713.7 939.1 866.7

+3M 1.04 1.05 715.1 709.2 932.7 932.8 875.0 864.9

+6M 1.08 1.05 689.1 705.4 870.4 927.4 833.3 864.0

+12M 1.12 1.06 664.5 697.0 830.4 917.4 785.7 861.4

15-Dec 123.5 118.6 6.02 7.92 7.31

+3M 123.8 122.9 119.0 117.4 6.01 6.05 7.84 7.95 7.35 7.37

+6M 127.4 122.9 118.0 116.8 5.84 6.04 7.38 7.95 7.06 7.40

+12M 132.2 122.8 118.0 115.6 5.63 6.04 7.04 7.95 6.66 7.46

NOK

EUR

USD

JPY

EUR USD DKK SEK


15-Dec 4.43 4.25 167.8 220.8 203.7

+3M 4.40 4.45 4.23 4.24 169.0 167.1 220.5 219.7 206.8 203.8

+6M 4.35 4.47 4.03 4.25 171.1 166.1 216.1 218.4 206.9 203.4

+12M 4.30 4.51 3.84 4.24 173.1 164.3 216.3 216.3 204.7 203.1

15-Dec 312.8 300.3 2.38 3.13 2.89

+3M 310.0 312.8 298.1 298.5 2.40 2.38 3.13 3.12 2.94 2.90

+6M 308.0 313.2 285.2 297.5 2.42 2.37 3.05 3.12 2.92 2.90

+12M 308.0 314.1 275.0 295.2 2.42 2.36 3.02 3.11 2.86 2.92

15-Dec 27.02 25.94 27.52 36.21 33.41

+3M 27.00 26.91 25.96 25.68 27.55 27.61 35.93 36.32 33.70 33.68

+6M 27.00 26.80 25.00 25.46 27.56 27.71 34.81 36.42 33.33 33.94

+12M 25.50 26.62 22.77 25.02 29.19 27.86 36.47 36.67 34.51 34.43

HUF

CZK

PLN

EUR USD DKK SEK NOK


15-Dec 64.45 61.87 11.53 15.18 14.01

+3M 62.40 65.70 60.00 62.71 11.92 11.31 15.54 14.88 14.58 13.79

+6M 60.70 67.21 56.20 63.84 12.26 11.05 15.49 14.53 14.83 13.53

+12M 59.58 70.13 53.20 65.90 12.49 10.58 15.61 13.92 14.77 13.07

DKK SEK

RUB

NOKEUR USD


15-Dec 3.67 3.53 202.5 266.4 245.9

+3M 3.74 3.74 3.60 3.57 198.7 198.5 259.1 261.0 243.1 242.0

+6M 3.89 3.85 3.60 3.66 191.4 193.0 241.8 253.7 231.5 236.4

+12M 4.42 4.08 3.95 3.83 168.2 181.8 210.2 239.3 198.9 224.7

15-Dec 14.59 14.00 51.0 67.1 61.9

+3M 14.98 14.84 14.40 14.17 49.7 50.1 64.8 65.8 60.8 61.0

+6M 15.77 15.18 14.60 14.42 47.2 48.9 59.6 64.3 57.1 59.9

+12M 16.58 15.85 14.80 14.90 44.9 46.8 56.1 61.6 53.1 57.8

DKK NOKUSDEUR

ZAR

TRY

SEK


Em

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Latin America


Emerging markets Asia



15-Dec 3.53 3.39 210.4 276.8 255.5

+3M 3.43 3.61 3.30 3.45 216.7 205.7 282.6 270.6 265.2 250.9

+6M 3.67 3.71 3.40 3.53 202.7 200.1 256.0 263.0 245.1 245.1

+12M 4.03 3.90 3.60 3.67 184.6 190.1 230.7 250.2 218.3 234.9

SEK

BRL

NOKEUR USD DKK


15-Dec 7.23 6.94 102.8 135.3 124.9

+3M 7.38 7.29 7.10 6.96 100.7 101.9 131.4 134.0 123.2 124.3

+6M 7.78 7.34 7.20 6.97 95.7 101.2 120.9 133.0 115.7 123.9

+12M 8.18 7.44 7.30 6.99 91.0 99.8 113.7 131.3 107.6 123.3

15-Dec 70.68 67.85 10.52 13.84 12.77

+3M 71.24 71.37 68.50 68.12 10.44 10.41 13.62 13.69 12.77 12.70

+6M 74.52 72.53 69.00 68.90 9.99 10.24 12.61 13.46 12.08 12.54

+12M 78.40 74.79 70.00 70.28 9.49 9.92 11.86 13.05 11.22 12.26

EUR USD DKK SEK NOK

INR

CNY


Em

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Forecasts vs forwards

3M – base currency EUR 3M – base currency USD

Source: Macrobond Financial, Danske Bank Markets Source: Macrobond Financial, Danske Bank Markets





-2.0-1.00.01.02.03.04.05.06.0

RU

B

BR

L

PLN

HU

F

INR

TR

Y

CZ

K

ZA

R

CN

Y

%

-3.0-2.0-1.00.01.02.03.04.05.0

RU

B

BR

L

PLN

HU

F

INR

TR

Y

CZ

K

ZA

R

CN

Y

%

-8.0-6.0-4.0-2.00.02.04.06.08.0

10.012.0

RU

B

PLN

HU

F

BR

L

CZ

K

TR

Y

INR

ZA

R

CN

Y

%

-6.0-4.0-2.00.02.04.06.08.0

10.012.014.0

RU

B

PLN

HU

F

BR

L

CZ

K

TR

Y

INR

ZA

R

CN

Y

%

-15.0

-10.0

-5.0

0.0

5.0

10.0

15.0

20.0

RU

B

PLN

CZ

K

HU

F

BR

L

ZA

R

INR

TR

Y

CN

Y

%

-10.0

-5.0

0.0

5.0

10.0

15.0

20.0

25.0

RU

B

PLN

CZ

K

HU

F

BR

L

ZA

R

INR

TR

Y

CN

Y

%


Em

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ts Briefer


Monetary policy calendar

Calendar


16 December 2016

Wider CEE

PLN 1.50 - 50 bp Mar, 2015 +25bp Q3 2017 11/01/2017 1.75

HUF 0.90 - 15 bp May, 2016 +15bp Q4 2017 20/12/2016 1.05

CZK 0.05 - 20 bp Nov, 2012 +50bp Q4 2017 Not announced 0.55

TRY 8.00 +50bp Nov, 2016 - Unchanged 2017 20/12/2016 8.00

CIS

RUB 10.00 -50bp Sep, 2016 -50bp Q2 2017 03/02/2017 7.00

MEA

ZAR 7.00 + 25 bp Mar, 2016 -25bp Q2 2017 24/01/2017 6.50

LATAM

BRL 13.75 -25bp Nov, 2016 -25bp Jan 2017 11/01/2017 13.25

EM Asia

CNY 4.35 - 25 bp Nov, 2015 -25bp Q2 2017 Not announced 4.10

INR 6.25 - 25 bp Oct, 2016 -25bp February 2017 08/02/2017 6.00

Year-end 2017 (%)

Next MeetingPolicy Rate (%) Latest Change Next Change


Em

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Disclosures This research report has been prepared by Danske Bank Markets, a division of Danske Bank A/S (‘Danske Bank’).

The authors of this research report are listed on the front page.

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Calculations and presentations in this research report are based on standard econometric tools and methodology as

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Major risks connected with recommendations or opinions in this research report, including a sensitivity analysis of

relevant assumptions, are stated throughout the text.

Expected updates

None.

Date of first publication

See the front page of this research report for the date of first publication.

General disclaimer This research has been prepared by Danske Bank Markets (a division of Danske Bank A/S). It is provided for

informational purposes only. It does not constitute or form part of, and shall under no circumstances be considered

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