Danske Research Team
Danske Bank A/S
Headlines
Market sentiment is gradually improving.
The ECB announced the results of its comprehensive review of European banks.
The Fed ended QE3.
Sweden’s Riksbank added to the group of central banks with a zero rate.
Market commentary
Following a shaky market in mid-October with volatile movements in rates, FX and stocks, the past two weeks have been relatively calm. In tandem with improved market sentiment, secondary as well as primary market activity has slowly picked up pace following the mid-October hiccup. Credit spreads have more or less moved sideways compared with the previous week, with a slight tightening tendency.
The week kicked off with the announcement of the results of the EBA stress tests on European banks. From a Nordic perspective, the results were positive, as they confirmed the robustness of the Nordic banks. As expected, the Nordic banks came out strong compared with the European average and were 7.4pp above the threshold of 5.5%, compared with the European average of 5.3pp. Among the Nordic banks, only the Danish banks were requested to implement the results of the AQR in their earnings, although most of this has already been included. More details on the stress tests can be found in the analysis Nordic Robustness: Nordic banks pass the EBA stress test with flying colours, 26 October
Reporting season is in full swing and we note a mixed picture among corporates, while the Nordic banks have presented positive reports overall. In the corporate sphere, Vattenfall‘s Q3 report stood out as the company is taking on a sizable impairment loss totalling SEK23bn, related mainly to non-Nordic operations.
In a rather quiet primary corporate market, Nestlé was able to come out with its first euro issue in over a year on Wednesday. The Swiss-based Aa2/AA-rated food conglomerate issued EUR500m at ms +20bp, a seven-year tenor. Among Nordic issuers, we note that the Swedish truck producer Scania issued SEK2.5bn two-year bonds at the spread ms +20bp.
This publication has been prepared by Danske Bank for information purposes only. It is not an offer or solicitation of any offer to purchase or sell any financial instrument. Whilst reasonable care has been taken to ensure that its contents are not untrue or misleading, no representation is made as to its accuracy or completeness and no liability is accepted for any loss arising from reliance on it. Danske Bank, its affiliates or staff, may perform services for, solicit business from, hold long or short positions in, or otherwise be interested in the investments (including derivatives), of any issuer mentioned herein. Danske Bank's research analysts are not permitted to invest in securities under coverage in their research sector.
This publication is not intended for private customers in the UK or any person in the US. Danske Bank A/S is regulated by the FSA for the conduct of designated investment business in the UK and is a member of the London Stock Exchange.
Copyright () Danske Bank A/S. All rights reserved. This publication is protected by copyright and may not be reproduced in whole or in part without permission.
Recommended Content
Editors’ Picks
AUD/USD: The hunt for the 0.7000 hurdle
AUD/USD quickly left behind Wednesday’s strong pullback and rose markedly past the 0.6900 barrier on Thursday, boosted by news of fresh stimulus in China as well as renewed weakness in the US Dollar.
EUR/USD refocuses its attention to 1.1200 and above
Rising appetite for the risk-associated assets, the offered stance in the Greenback and Chinese stimulus all contributed to the resurgence of the upside momentum in EUR/USD, which managed to retest the 1.1190 zone on Thursday.
Gold holding at higher ground at around $2,670
Gold breaks to new high of $2,673 on Thursday. Falling interest rates globally, intensifying geopolitical conflicts and heightened Fed easing bets are the main factors.
Bitcoin displays bullish signals amid supportive macroeconomic developments and growing institutional demand
Bitcoin (BTC) trades slightly up, around $64,000 on Thursday, following a rejection from the upper consolidation level of $64,700 the previous day. BTC’s price has been consolidating between $62,000 and $64,700 for the past week.
RBA widely expected to keep key interest rate unchanged amid persisting price pressures
The Reserve Bank of Australia is likely to continue bucking the trend adopted by major central banks of the dovish policy pivot, opting to maintain the policy for the seventh consecutive meeting on Tuesday.
Five best Forex brokers in 2024
VERIFIED Choosing the best Forex broker in 2024 requires careful consideration of certain essential factors. With the wide array of options available, it is crucial to find a broker that aligns with your trading style, experience level, and financial goals.