Morning Report

27.01.2012

Strong Rise in U.S. Orders Was Not Enough

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

Market sentiment impaired despite several good figures yesterday

3.20 2.90 2.60 2.30

19-Dec 6-J an 26-J an

EURNOK

SEK & 3m STIBOR 9.1 9.0 8.9 8.8 8.7 19-Dec 6-Jan
3m ra.

In currency markets, there have been relatively changes since yesterday morning. EURUSD is down 0.1 per cent. The same is EURNOK. But the Japanese yen continued to recover with a decline in USDJPY at 0.7 per cent. The Swedish krona also moved more than other currencies, with a decline of 0.7 per cent against the euro since yesterday morning. In the United States the market sentiment turned in a weaker direction with decline for the main indices in the stock markets and decline in long-term Treasury yields. Greece and its private creditors yesterday made progress in the talks of restructuring debt. The talks have mainly focused on technical and legal issues. The parties will continue talks today with the aim of seal an agreement within a few days. Sunday the EU summit begins. The agenda for this meeting is fiscal integration, but an agreement between Greece and its private creditors would be a good start to the meeting. On the calendar today U.S. fourth quarter GDP figures will be the most important figures. It is expected that growth picked up in the last quarter and the average forecasts according to Reuters is an annualized growth of 3.0 per cent. In Norway, Statistics Norway will release its Business Tendency Survey for the manufacturing industry. It is a quarterly survey and it is likely that the sentiment has been further impaired in the third quarter. Central Bank Governor ystein Olsen will lecture in Moss, but is not expected to give new signals on monetary policy. Yesterday there were a number of positive figures. U.S. durable orders increased in December for the third consecutive month and clearly more than expected. In addition, the figures for November revised up. Aircraft and parts pulled up but even excluding transportation orders rose by 2.1 per cent from November to December. Chicago Fed Activity Index picked up in December. In Germany GfKs consumer confidence index for January increased by 0.2 points to 5.9. Maybe not as big upswing, but it was expected a small decline. The index has now risen five months in a row and has come above its long-term average. The increase can no longer be considered a coincidence. Households' expectations of their own economy are little changed, but the faith of the German economy as a whole is strengthened. Households also increase the desire to make major purchases. Also in France and Sweden the consumer confidence increased in January. In France the increase was relatively small and the level is low, indicating a further decline in consumption. In Sweden the increase was relatively strong and clearly larger than expected. But even here the level is low: Nearly one standard deviation below the long-term average. But yesterday also offered some weak numbers. In the U.S. the initial claims rose by 21' last week. It was a bit more than expected. The increase came, however, after a week with a marked fall and the average for the past four weeks still trends downwards. The decline in new homes sales figures in December was probably more disappointing. The fall came after three months of recovery and it was expected that it would continue. Turnover is low and the main picture is that new home sales are fairly flat. There have been several positive signals from the U.S. housing market in the past, but yesterday's figures remind us that the mood in the U.S. housing market is still relatively lackluster. In Sweden, exports fell by 0.1 per cent from November to December. It is the sixth consecutive month of decline in exports, but the decline in November was not as large as previously reported. Imports rose by 0.7 per cent from November to December. It could indicate some growth in domestic demand, but the level of imports is not higher than a year ago. Net export is likely a negative contributor to GDP for Sweden in the fourth quarter. The Swedes also published employment figures yesterday. The seasonally adjusted unemployment rate rose from 7.4 per cent to 7.5 per cent. All in all, it seems that the positive trend of decline in unemployment has stopped. Employment, that previously rose sharply, is now growing far more moderate. It hangs well together with other macroeconomic figures that point to a marked slowdown of the Swedish economy. kyrre.aamdal@dnb.no As of Unit Yesterday's key economic events (GMT) 08:30 Sweden Unemployment Dec % na 13:30 US Orders, durable goods Dec m/m % 13:30 US Initial claims week 3 1000 15:00 US New home sales Dec 1000 As of Unit Todays key economic events (GMT) 09:00 Norway Statistic Norway' business tendency survey 10:00 Norway Consumer confidence Jan Index 14:30 US GDP Q4 q/q %, ar Prior 6.7 3.7 352 315 Prior -3.5 1.8 Poll 7.0 1.8 370 320 Poll Actual -1.3 3.0 377 307 DNB -3.0 3.0

2.80 2.70 2.60 2.50 2.40 26-J an

EURSEK

Headquarters 0021 Oslo Stranden 21

+47 03000

Offices Abroad New York London Shanghai Singapore Stockholm

+1 212 681 3800 +44 207 6211111 +86 21 6132 2888 +65 6220 6144 +46 8 4734850

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

22 94 89 40 22 01 78 20 22 01 76 50

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

55 21 95 80 75 52 9910 69 39 41 50 62 54 14 82 52 72 09 06 61 24 79 56 38 07 28 62 22 01 76 50 51 84 04 30 77 62 96 80 73 58 74 89 33 01 73 80 70 11 69 85

Research Regional Sales (+47) Eirik Larsen 22 01 76 55

Research FX/IR (+47) ystein Drum Kjersti Haugland Ole Andr Kjennerud Knut A. Magnussen Camilla Viland Kyrre Aamdal

22 01 76 56 22 01 78 03 22 01 78 24 22 01 76 63 22 01 77 41 22 01 76 67

Credit Research (+47) Ole Einar Stokstad Mikael L. Gjerding se Haagensen Rolv Kristian Heitmann Thomas Larsen Knut Olav Rnningen

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

Morning Report
27.01.2012

SPOT RATES AND FORECASTS

Oil spot & NOK TWI 118 112 106 100 19-Dec 6-Jan 100 98 96 94 26-J an
$/b

NOK TWI ra.

EUR vs GBP & CHF 0.85 0.84 1.20 0.83 1.15 0.82 1.10 0.81 19-Dec 6-Jan 26-Jan 1.25
GBP r.a CHF

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

Prior 77.45 1.310 0.835 1.206 7.649 8.893 7.435 5.841 7.540 0.861 9.162 6.789 8.769 1.163 10.651

Last 77.05 1.309 0.835 1.207 7.660 8.900 7.434 5.854 7.598 0.862 9.184 6.798 8.828 1.163 10.661

% -0.5% -0.1% 0.0% 0.0% 0.1% 0.1% 0.0% 0.2% 0.8% 0.1% 0.2% 0.1% 0.7% -0.1% 0.1%

In 1 m ...3 m 77 77 1.25 1.20 0.82 0.80 1.23 1.23 7.80 7.80 9.10 9.20 7.45 7.45 6.24 6.50 8.10 8.44 0.86 0.85 9.5 9.8 7.28 7.67 5.61 5.90 1.17 1.18 11.10 11.50

...6 m ...12 m 77 85 1.20 1.35 0.80 0.85 1.23 1.30 7.65 7.65 9.00 9.00 7.45 7.45 6.38 5.67 8.28 6.67 0.85 0.85 9.6 9.0 7.50 6.67 5.78 5.67 1.18 1.18 11.25 10.59

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

USD 1.0619 1.0039 0.9219 19.26 5.6794 1.5688 7.7590 123.61 0.2783 2.6373 0.5344 0.8218 3.2420 1.2575 30.3950

% -0.03% 0.19% 0.08% 0.10% 0.07% 0.02% 0.03% 0.07% 0.00% 0.06% 0.15% 0.29% 0.08% -0.06% 0.22%

EURSEK & OMXS 9.1 9.0 8.9 8.8 19-Dec 6-Jan 500 450 400 350 26-Jan

OMXS ra. EURSEK

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

N IBOR Prior 2.32 2.68 2.96 3.12 2.74 3.05 3.34 3.59

SWAP AN D MON EYM ARKET RATES STIBOR EURIBOR Last Prior Last Prior 2.35 2.32 2.31 0.68 2.74 2.60 2.59 1.09 3.01 2.67 2.66 1.40 3.19 2.72 2.72 1.59 2.72 1.86 1.86 1.24 3.02 2.04 2.02 1.63 3.32 2.24 2.24 2.00 3.58 2.41 2.39 2.36

Last 0.67 1.08 1.40 1.58 1.24 1.62 1.98 2.36

USD LIBOR Prior 0.27 0.56 0.79 0.94 0.63 1.07 1.54 2.03

Last 0.27 0.55 0.79 0.94 0.62 1.06 1.55 2.04

Gov. Bonds, 10y 2.00 1.75 1.50

NOK, ra.

3.00 2.50 2.00 1.50

SEK

10y 10y yield vs bund

N ORWAY Prior Last 115.08 111.25 2.39 0.50 2.39 0.53

GOVERNM ENT BON DS SWEDEN GERMANY US Prior Last Prior Last Prior 116.02 116.05 101.094 101.32 100.53125 1.80 -0.10 1.79 -0.07 1.89 1.85 1.94 0.05

Last 100.59 1.94 0.09

19-Dec 6-Jan 26-Jan

13 12 11

JPY and DowJones

10 19-Dec

6-Jan

79 78 77 76 75 26-Jan

In 3m 6m 12m

INTEREST RATE FORECASTS N ORWAY SWEDEN GERMANY 3m nibor 10y swap 3m stibor 10y swap 3m euribor 10y swap 2.40 3.50 2.15 2.25 1.05 2.50 2.30 3.75 1.95 2.50 0.90 2.75 2.30 4.25 1.75 3.00 0.90 3.25

US 3m libor 10y 0.55 0.55 0.50

swap 2.25 2.50 3.00

USDJPY ra. DowJones, 1000

USD and gold 1900 1800 1700 1600 1500

EURUSD ra.

1.42 1.38 1.34 1.30 1.26

Gold

19-Dec 6-Jan 26-Jan

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

3m 2.59 2.30 2.26 2.25 3m 2.29 1.90 1.63 1.59

Prior 2.59 2.31 2.26 2.26 Prior 2.31 1.94 1.66 1.60

chg 0.00 -0.01 0.00 -0.01 chg -0.02 -0.04 -0.04 -0.01

MISCELLANEOUS TWI Today % Stock ex. Today % NOK 95.80 0.15 Dow Jones 12,734.6 -0.2% SEK 117.88 0.14 Nasdaq 2,805.3 -0.5% EUR 102.76 - 0.20 FTSE100 5,795.2 1.3% USD 79.42 0.03 Eurostoxx50 2,460.4 1.6% GBP 80.80 - 0.0 Dax 6,539.9 1.8% Comm. Today Last Nikkei225 8,841.2 0.0% Brent spot 109.8 109.8 Oslo 399.71 1.1% Brent 1m 110.7 110.8 Stockholm 480.51 1.9% 1.1% Spot gold 1727.0 1727.0 Copenhagen 529.71 Sources to all tables and graphics: Reuters and DNB Markets

Morning Report
27.01.2012
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