Morning Report

30.01.2012

Growth in the US picks up

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

Growth in the U.S. picked up in Q4 2011, while the Statistics Norway's business cycle indicator confirms our view of dual development of the Norwegian economy.
3.20 2.90 2.60 2.30

20-Dec 9-J an 27-J an

EURNOK

U.S. GDP figures for Q4 came in slightly on the positive side. Growth was 2.8 percent annualized, which is somewhat lower than expected (3.0 per cent according to Reuters). Meanwhile, growth was the strongest we've seen of the U.S. economy since the Q2 2010. While growth as a whole can be regarded as positive, it was slightly more negative that more than half of the growth came from inventories, which contributed 1.8 percentage points. Consumption growth in the fourth quarter was 2 percent, and the contribution to GDP growth was thus 1.2 per cent. Consumption in the US is thus still somewhat mitigated. Going forward, we expect consumption growth will pick up to 2.5 percent annualized, corollary with the improved conditions in the labor market. An inventory driven growth probably explains some of the depreciation of dollar versus other major currencies. The euro has strengthened by 0.6 percent against dollar, which is now traded at 1.3180 against euro. The euro-strengthening is somewhat more moderate to versus the Norwegian krone. EURNOK is now traded at 7.6680, and thus remains in the lower end of the established trading range of 7.65 to 7.90. Another contributing factor to the FX movements is reported to be that European politicians and representatives for private investors now are one step closer to an agreement on the restructuring of Greek debt. According to the Financial Times, private investors agree to cut debt by 70 percent. The final agreement that will ensure Greece to receive a new loan tranche has not been formalized, as the Greek authorities have failed to reveal how the remaining budget deficit will be covered. According to a note the Financial Times has access to, EU and IMF has presented a list of "priority actions" that the Greeks must take before accessing new loans. The measures include cuts in public sector jobs by150 000 over the next three years. The goal is that the Greek debt is reduced to 120 percent of GDP by 2020. On Friday several reports on the Norwegian economy were published. Statistics Norway's business cycle indicator for the fourth quarter confirms our perception of a dual development of the Norwegian economy, where export-oriented industries are struggling, while the industries in which activity is more skewed towards the domestic market still experience good times. Norwegian industrial firms report the trend in export markets to be negative. The overall short-term outlook, however, is positive, based on an improvement in domestic markets. While producers of intermediate goods report a reduction in employment and weaker growth in output, manufacturers of capital goods report that employment and output is growing. Lack of skilled labor is conceived as a limitation to further production growth. Demand for consumer goods increased in the fourth quarter. Expected improvement in market conditions explains why manufacturers of consumer goods are considering the current situation as positive. This is supported by the recent consumer confidence by Opinion. According to the survey, households have become more positive about both their own and the country's economy. After falling in the preceding three months, the ForbrukerMeteret increased from -3.5 in December to 2.3 in January. Households still perceive their own economy to be better than the nation's economy, but the increase from December to January is mainly driven by a surge in expected development in the nation's economy. Despite a somewhat more positive mood, consumers expect savings to increase over the next 12 months. We expect the household saving rate will increase to almost 11 percent in 2012. Several important figures will be published this week. Today Fed's lending survey for the fourth quarter. will be published. In Q3 banks reported that lending conditions eased somewhat. Simultaneously, some banks reported credit conditions to tighten, partly because of higher uncertainty regarding the economic and political development. Later this week we also get the ISM index and pay rolls from the US, where both have shown a positive trend in recent months. The ISM index is now expected to rise by 0.4 points to 54.5 (Reuters), while preliminary estimates of payrolls is 167 000 (Reuters). ole.kjennerud@dnb.no As of Unit Yesterday's key economic events (GMT) 09:00 Norway Statistic Norway' business tendency survey 10:00 Norway Consumer confidence Jan Index 14:30 USA GDP Q4 q/q % As of Unit Todays key economic events (GMT) 13:30 USA Cons. deflator, core Dec y/y % 13:30 USA Private consumption Dec y/y % USA Prior Poll Actual

SEK & 3m STIBOR 9.1 9.0 8.9 8.8 8.7 20-Dec 9-Jan
3m ra.

2.80 2.70 2.60 2.50 2.40 27-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

-3.5 2.7 1.8 3.0 2.8 Prior Poll DNB 1.7 0.1 0.1 Fed's lendig survey for Q4

Morning Report
30.01.2012

SPOT RATES AND FORECASTS

Oil spot & NOK TWI 118 112 106 100 20-Dec 9-Jan 100 98 96 94 27-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 20-Dec 9-Jan 27-Jan 1.25
GBP r.a CHF

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

Prior 76.68 1.323 0.841 1.206 7.671 8.916 7.434 5.801 7.567 0.861 9.127 6.743 8.798 1.162 10.608

Last 76.74 1.316 0.840 1.206 7.676 8.920 7.434 5.835 7.615 0.862 9.144 6.783 8.847 1.164 10.632

% 0.1% -0.5% -0.1% 0.0% 0.1% 0.1% 0.0% 0.6% 0.6% 0.1% 0.2% 0.6% 0.6% 0.1% 0.2%

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 1.0565 1.0057 0.9170 19.13 5.6514 1.5672 7.7587 123.26 0.2777 2.6249 0.5317 0.8187 3.2223 1.2586 30.4050

% -0.84% 0.45% 0.55% 0.62% 0.54% -0.40% 0.04% 0.33% -0.04% 0.46% 0.53% -0.66% 0.73% 0.56% 0.91%

EURSEK & OMXS 9.1 9.0 8.9 8.8 20-Dec 9-Jan 500 450 400 350 27-Jan

OMXS ra. EURSEK

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

N IBOR Prior 2.35 2.74 3.01 3.19 2.74 3.03 3.32 3.57

SWAP AN D MON EYM ARKET RATES STIBOR EURIBOR Last Prior Last Prior 2.30 2.31 2.32 0.67 2.70 2.59 2.58 1.08 2.97 2.66 2.67 1.40 3.13 2.72 2.72 1.58 2.72 1.88 1.88 1.27 3.00 2.03 2.03 1.65 3.30 2.24 2.23 2.01 3.55 2.38 2.37 2.36

Last 0.67 1.07 1.39 1.58 1.27 1.63 1.98 2.33

USD LIBOR Prior 0.27 0.55 0.79 0.94 0.62 1.04 1.53 2.01

Last 0.27 0.55 0.79 0.93 0.63 1.04 1.51 1.99

Gov. Bonds, 10y 2.00 1.75 1.50

NOK, ra.

3.00 2.50 2.00 1.50

SEK

20-Dec 9-Jan 27-Jan

10y 10y yield vs bund

N ORWAY Prior Last 115.17 111.30 2.39 2.38 0.52 0.55

GOVERNM ENT BON DS SWEDEN GERMANY US Prior Last Prior Last Prior 116.354 116.35 101.248 101.49 100.96875 1.76 1.76 1.86 1.83 1.89 -0.10 -0.08 0.03

Last 101.13 1.88 0.05

13 12 11

JPY and DowJones

10 20-Dec

9-Jan

79 78 77 76 75 27-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 1.42 1800 1.38 1700 1.34 1600 1.30 1500 1.26 20-Dec 9-Jan 27-Jan
EURUSD ra. Gold

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

3m 2.59 2.33 2.27 2.26 3m 2.33 1.96 1.68 1.60

Prior 2.59 2.33 2.28 2.28 Prior 2.33 1.96 1.68 1.61

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

MISCELLANEOUS TWI Today % Stock ex. Today % NOK 96.00 0.01 Dow Jones 12,660.5 -0.6% SEK 118.12 0.11 Nasdaq 2,816.6 0.4% EUR 103.14 - 0.27 FTSE100 5,733.5 -1.1% USD 79.15 0.40 Eurostoxx50 2,436.6 -1.0% GBP 0.00 - 100.0 Dax 6,512.0 -0.4% Comm. Today Last Nikkei225 8,793.1 0.0% Brent spot 111.3 111.3 Oslo 399.51 -0.1% Brent 1m 111.0 111.5 Stockholm 478.97 -0.3% -0.9% Spot gold 1726.0 1726.0 Copenhagen 524.88 Sources to all tables and graphics: Reuters and DNB Markets

Morning Report
30.01.2012
IMPORTANT/DISCLAIMER This note (the Note) must be seen as marketing material and not as an investment recommendation within the meaning of the Norwegian Securities Trading Act of 2007 paragraph 3-10 and the Norwegian Securities Trading Regulation 2007/06/29 no. 876. The Note has been prepared by DNB Markets, a division of DNB Bank ASA, a Norwegian bank organized under the laws of the Kingdom of Norway (the Bank), for information purposes only. The Note shall not be used for any unlawful or unauthorized purposes. The Bank, its affiliates, and any third-party providers, as well as their directors, officers, shareholders, employees or agents (individually, each a DNB Party; collectively, DNB Parties) do not guarantee the accuracy, completeness, timeliness or availability of the Note. DNB Parties are not responsible for any errors or omissions, regardless of the cause, nor for the results obtained from the use of the Note, nor for the security or maintenance of any data input by the user. The Note is provided on an as is basis. DNB PARTIES DISCLAIM ANY AND ALL EXPRESS OR IMPLIED WARRANTIES, INCLUDING, BUT NOT LIMITED TO, ANY WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE, FREEDOM FROM BUGS, SOFTWARE ERRORS OR DEFECTS, THAT THE NOTES FUNCTIONING WILL BE UNINTERRUPTED OR THAT THE NOTE WILL OPERATE WITH ANY SOFTWARE OR HARDWARE CONFIGURATION. In no event shall DNB Parties be liable to any party for any direct, indirect, incidental, exemplary, compensatory, punitive, special or consequential damages, costs, expenses, legal fees, or losses (including, without limitation, lost income or lost profits and opportunity costs) in connection with any use of the Note, even if advised of the possibility of such damages. Any opinions expressed herein reflect the Banks judgment at the time the Note was prepared and DNB Parties assume no obligation to update the Note in any form or format. The Note should not be relied on and is not a substitute for the skill, judgment and experience of the user, its management, employees, advisors and/or clients when making investment and other business decisions. No DNB Party is acting as fiduciary or investment advisor in connection with the dissemination of the Note. While the Note is based on information obtained from public sources that the Bank believes to be reliable, no DNB Party has performed an audit of, nor accepts any duty of due diligence or independent verification of, any information it receives. Confidentiality rules and internal rules restrict the exchange of information between different parts of the Bank and this may prevent employees of DNB Markets who are preparing the Note from utilizing or being aware of information available in DNB Markets/the Bank which may be relevant to the recipients of the Note. The Note is not an offer to buy or sell any security or other financial instrument or to participate in any investment strategy. Distribution of material like the Note is in certain jurisdictions restricted by law. Persons in possession of the Note should seek further guidance regarding such restrictions before distributing the Note. The Note is for clients only, and not for publication, and has been prepared for information purposes only by DNB Markets - a division of DNB Bank ASA registered in Norway with registration number NO 984 851 006 (the Register of Business Enterprises) under supervision of the Financial Supervisory Authority of Norway (Finanstilsynet), Monetary Authority of Singapore, the Chilean Superintendent of Banks, and on a limited basis by the Financial Services Authority of UK. Information about DNB Markets can be found at dnb.no. Additional information for clients in Singapore The Note has been distributed by the Singapore branch of DNB Bank ASA. It is intended for general circulation and does not take into account the specific investment objectives, financial situation or particular needs of any particular person. You should seek advice from a financial adviser regarding the suitability of any product referred to in the Note, taking into account your specific financial objectives, financial situation or particular needs before making a commitment to purchase any such product. Recipients of the Note should note that, by virtue of their status as accredited investors or expert investors, the Singapore branch of DNB Bank ASA will be exempt from complying with certain compliance requirements under the Financial Advisers Act, Chapter 110 of Singapore (the FAA), the Financial Advisers Regulations and associated regulations there under. In particular, it will be exempt from: - Section 27 of the FAA (which requires that there must be a reasonable basis for recommendations when making recommendations on investments). Please contact the Singapore branch of DNB Bank ASA at +65 6212 0753 in respect of any matters arising from, or in connection with, the Note. We, the DNB group, our associates, officers and/or employees may have interests in any products referred to in the Note by acting in various roles including as distributor, holder of principal positions, adviser or lender. We, the DNB group, our associates, officers and/or employees may receive fees, brokerage or commissions for acting in those capacities. In addition, we, the DNB group, our associates, officers and/or employees may buy or sell products as principal or agent and may effect transactions which are not consistent with the information set out in the Note. Additional Information, including for Recipients in the In the United States: This note (the Note) is a market letter, as the term is defined in NASD Rule 2211, and, thus, does not constitute a research report within the meaning of U.S. securities laws and regulations, including, without limitation, SEC Rule 15a-6, NASD Rule 2711 and Regulation AC.