Morning Report

24.11.2011

Just another day going down the drain

NOK & 3m NIBOR 8.00 7.80 7.60 7.40
3m ra.

3.20 3.10 3.00 2.90

EURNOK

0230 GMT: Chinas manufacturing PMI falls 3 points in November, to its lowest level sionce March 2009. The Peoples Bank of China (PBC) enters the stage, and states that it this month will cut the primary reserve requirement for 20 rural bank cooperatives from 16% to 16% - the first indication that monetary policy is about to turn expansionary again. Chinese authorities are concerned that a coming Western downturn will hit China. More easing will follow. 0745 GMT: The INSEE-index, which measures French manufacturing activity falls to 95 in November, its fifth monthly decline in a row, the third below its long-term average, and the lowest in 1 years. 0900 GMT: Flash-PMIs for the Eurozone, and its largest members. The business conditions in the manufacturing industry continues its decline, from 47.1 in October to 46.4 in November. Fourth month in a row below 50, and a continued increase in the number of pessimists. We have to go back to July 2009 to find weaker data. The European manufacturing industry is contracting. The Services PMI came out slightly better than expected, however, but even this sector is contracting, for the third month in a row. 1000 GMT: EZ manufacturing orders decline by 6.4% in September, the largest monthly decline in three years. The PMI indices for October and November warns that orders will fall more going forward. 1000 GMT: The German state undertakes an unsuccessful bond auction, where investors only bid for two thirds of the offered amount. Bundesbank has to take the rest. German 10 year government bond rates increased by over 20 bp. The euro declines by 1.1% against the USD over the day. Speculations folow: Are investors about to pull out from everything that looks like an , walks like an , and smells like one? Do they fear that Germany will end up with Italian and Spanish public debt on top of their own? 1230 GMT: Commission President Jos Barroso presents new estimates that show 0.6% growth in EU next year. Also, the Commission presents a Green Paper with a long-awaited proposal for so-called Stabilitety Bonds (which we up to now have labelled Euro-bonds), i.e. government bonds issued by EZ countries which are wholly or partially guaranteed by all EZ nations. This could well be a good concept the day the EZ countries are tied together in a tighter political federation, but now??? The crisis is becoming more and more acute, and the Commission presents proposals that it must know will take months, maybe years, to be approved. Which planet are they on? Germanys reaction is swift, with Angela Merkel labelling the proposal extraordinarily inappropriate. 1330 GMT: A small, but important dosage of US indicators. Third quarter GDP growth is lowered from 2.5% to 2.0%. But the third quarter is history. And the fourth quarter does not start too well. Durable goods orders decline 0.7% in October, and by 1.8% if airplanes and defense orders are excluded. Is it the European downturn that is strating to bite? More important: Private consumption only increases by 0.1% in October. If the next two months prove similar, consumption will only increase by an annualised 2% in the fourth quarter. Mildly disappointing unemployment data, 2000 higher initial claims than the previous week, only add spice to a soup that does not taste well. When the working day draws to an end, and most stock exchanges (again) ending the day in red, the clock seems already to be fast approaching five to midnight. Something better change, as the Stranglers would have said. And pretty soon, one should add. oystein.dorum@dnb.no

14-Oct 3-Nov 23-Nov

SEK & 3m STIBOR 9.3 9.2 9.1 9.0 8.9 14-Oct 3-Nov
3m ra.

2.65 2.60 2.55 2.50 2.45 23-Nov

EURSEK

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Sales Oslo (+47) Equity Fixed Income FX/IR

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Regional sales (+47) Bergen Bod Fredrikstad Hamar Haugesund Lillehammer Kristiansand Oslo Stavanger Troms Trondheim Tnsberg lesund

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22 01 78 37 22 01 77 62 22 01 76 93 22 01 76 77 22 01 77 36 22 01 78 15

Yesterday's key economic events (GMT) 08:58 EMU PMI, total 09:00 Norway LFS-Unemployment 13:30 USA Personal expenditures 13:30 USA Orders, durable goods Todays key economic events (GMT) 09:00 Italy Consumer confidence 09:00 Germany IFO, total 12:00 UK CBI, orders

As of Nov Sep Oct Oct As of Nov Nov Nov

Unit Index % M/m % M/m % Unit Index Index Index

Prior 46.5 3.2 0.7r -1.5r Prior 92.9 106.4 -18.0

Poll 46.0 0.4 -1.0 Poll 92.4 105.1 -18.0

Actual 47.2 3.3 0.1 -0.7 DNB

Morning Report
24.11.2011

SPOT RATES AND FORECASTS

Oil spot & NOK TWI 120 115 110 105 100 14-Oct 3-Nov
NOK TWI ra.

100 98 96 94 23-Nov
$/b

EUR vs GBP & CHF 0.89 0.88 0.87 1.15 0.86 1.10 0.85 14-Oct 3-Nov 23-Nov 1.25 1.20
GBP r.a CHF

FX USDJPY EURUSD EURGBP EURCHF EURNOK EURSEK EURDKK USDNOK JPYNOK SEKNOK GBPNOK USDSEK JPYSEK NOKSEK GBPSEK

Prior 77.35 1.334 0.860 1.228 7.828 9.238 7.436 5.870 7.588 0.848 9.107 6.929 8.958 1.181 10.752

Las t 77.17 1.337 0.860 1.229 7.826 9.239 7.438 5.857 7.596 0.848 9.107 6.914 8.966 1.181 10.751

% -0.2% 0.2% 0.0% 0.1% 0.0% 0.0% 0.0% -0.2% 0.1% 0.0% 0.0% -0.2% 0.1% 0.0% 0.0%

In 1 m ...3 m 80 80 1.35 1.35 0.86 0.86 1.23 1.23 7.80 7.80 9.20 9.10 7.45 7.45 5.78 5.78 7.22 7.22 0.85 0.86 9.1 9.1 6.81 6.74 5.45 5.39 1.18 1.17 10.70 10.58

...6 m ...12 m 80 90 1.30 1.25 0.84 0.82 1.23 1.25 7.70 7.70 9.00 9.00 7.45 7.45 5.92 6.16 7.40 6.84 0.86 0.86 9.2 9.4 6.92 7.20 5.54 6.48 1.17 1.17 10.71 10.98

FX AUD CAD CHF CZK DKK GBP HKD ISK KWD LTL LVL NZD PLN SGD RUB

USD 0.9718 1.0485 0.9202 19.28 5.5654 1.5549 7.7942 119.41 0.2765 2.5840 0.5254 0.7424 3.3670 1.3098 31.4700

% 0.32% 0.06% -0.08% -0.08% -0.18% 0.19% 0.00% -0.16% -0.16% -0.21% -0.25% 0.30% -0.24% -0.14% -0.17%

EURSEK & OMXS 9.4 9.2 9.0 8.8 14-Oct 3-Nov 500 450 400 350 23-Nov

OMXS ra. EURSEK

1m 3m 6m 12m 3y 5y 7y 10y

NIBOR Prior 2.90 3.33 3.39 3.42 3.07 3.37 3.59 3.82

SWAP AN D MONEYM AR KET RATES STIBOR EUR IBOR Las t Prior Last Prior 2.82 2.37 2.37 1.14 3.27 2.64 2.64 1.41 3.33 2.67 2.68 1.65 3.38 2.74 2.75 1.83 3.06 1.96 1.96 1.69 3.38 2.15 2.15 2.09 3.61 2.34 2.34 2.36 3.82 2.45 2.45 2.65

Last 1.13 1.41 1.65 1.83 1.68 2.05 2.36 2.64

USD LIBOR Prior 0.26 0.50 0.71 0.87 0.90 1.32 1.71 2.09

Last 0.26 0.51 0.72 0.88 0.92 1.34 1.74 2.11

Gov. Bonds, 10y 4.00 3.50 3.00 1.75 2.50 1.50 2.00 14-Oct 3-Nov 23-Nov 2.25 2.00
NOK, ra. SEK

10y 10y yield vs bund

NORW AY Prior Las t 115.2 110.85 2.45 #VALUE! 0.36

GOVERNM ENT BONDS SW EDEN GERMANY US Prior Last Prior Last Prior 117.782 117.77 101.578 101.34 101.01563 1.65 1.64 2.02 2.10 1.89 -0.38 -0.45 -0.14

Last 101.02 1.90 -0.20

JPY and DowJones 13 12 11 10 14-Oct 79 77 3-Nov 75 23-Nov

In 3m 6m 12m

INTEREST RATE FORECASTS NORW AY SW EDEN GERMANY 3m nibor 10y swap 3m stibor 10y swap 3m euribor 10y swap 3.00 4.25 2.20 3.00 1.30 3.00 2.80 4.50 2.10 3.25 1.10 3.25 3.10 4.50 2.00 3.25 1.05 3.25

US 3m libor 10y s wap 0.55 2.75 0.55 3.00 0.50 3.25

USDJPY ra. DowJones, 1000

USD and gold 1.47 2000 1900 1.42 1800 1700 1.37 1600 1500 1.32 14-Oc t 3-Nov 23-Nov
EURUSD ra. Gold

FRA NOK DEC MAR JUN SEP FRA SEK DEC MAR JUN SEP

3m 3.06 2.71 2.50 2.48 3m 2.61 2.10 1.78 1.64

Prior 3.06 2.72 2.51 2.50 Prior 2.61 2.10 1.77 1.64

chg 0.00 -0.01 -0.01 -0.02 chg 0.00 0.00 0.00 -0.01

MISCELLANEOUS TWI Today % Stock ex. Today % NOK 97.88 Dow Jones 11,257.6 -2.1% SEK 122.03 0.07 Nasdaq 2,460.1 -2.4% EUR 105.33 0.03 FTSE100 5,139.8 -1.3% USD 78.95 - 0.07 Eurostoxx50 2,096.8 -1.9% GBP 79.90 Dax 5,457.8 -1.4% Comm. Today Last Nikkei225 8,165.2 : Brent spot 107.4 107.4 Oslo 348.73 -3.2% Brent 1m 107.4 107.0 Stockholm 405.75 -1.8% -0.5% Spot gold 1681.0 1681.0 Copenhagen 468.84 Sources to all tables and graphics: Reuters and DNB Markets

Morning Report
24.11.2011
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