Macro Strategy Views: Many trading opportunities in the Scandinavian fixed income market

In our weekly podcast, Macro Strategy Views, we focus today on the European and Scandinavian fixed income markets. Arne Lohmann Rasmussen, Head of Fixed Income Research, chairs today’s podcast and our Chief Fixed Income Analyst Jens Peter Sørensen joins him. The main focus today is the Scandinavian fixed income markets. The new Swedish government will have little financial impact on the Swedish markets. Focus is still on Riksbank news and the benign inflation outlook, both of which point to value in the Swedish curve. Japanese investors have been active in Swedish mortgage bonds but the recent rate hike has made hedging of the currency risk more expensive for foreign investors. In Denmark, we see the value in the mortgage bond market and see no independent rate hike. Finally, in Norway, the growth story is intact and the market seems to underestimate the risk of a rate hike in 2019. Finally, we briefly discuss the short-term outlook for Bund yields and argue that yields will stay low for the next couple of weeks due to Brexit and US government shutdown uncertainty.