Weekly Focus Sweden US labour market report in focus

Investment Research General Market Conditions 3 March 207 Weekly Focus Sweden US labour market report in focus Market movers ahead In the US, the key event of next week is Friday s labour market report. We forecast it will show a total of 60,000 new jobs, an unchanged unemployment rate of 4.7% and monthly wage growth of 0.2% m/m. The week also brings ISM manufacturing for March and a number of speeches by FOMC members. In the euro area, ECB minutes will be scrutinised by markets for clues on whether a rate hike before QE termination is on the cards. We do not think so. The week also brings the monthly labour markets report, retails sales and German factory orders. In the UK, PM Theresa May triggered Article 50 this week, meaning Brexit negotiations have officially started and we are likely to begin to get more headlines about what to expect of the negotiations in coming weeks and months. For more information on what happens next, see Brexit Monitor No. 27: Brexit negotiations set to start today what now? 29 March. The week also brings PMIs and the NIESR GDP estimate. In China, focus is on Caixin manufacturing PMI on Monday. The official PMI manufacturing on Friday surprised a bit on the upside and pointed to continued strong growth in March. We look for a rise to 52.0, from 5.7 in February. In the Scandi area, the key releases are currency reserve data from Danmarks Nationalbank and industrial production releases for Norway, Sweden and Denmark. Global macro and market themes The EU favours a multi-speed Europe progress will depend on upcoming elections. Contents Market movers... 2 Global Macro and Market Themes... 5 Scandi Update... 7 Latest research from Danske Bank Markets... 8 Macroeconomic forecast... 9 Financial forecast... 0 Calendar... Financial views Major indices 3-Mar 3M 2M 0yr EUR swap 0.82 0.85.30 EUR/USD 09 08 4 ICE Brent oil 50 53 6 3-Mar 6M 2-24M S&P500 2344 5-0% 0-5% Source: Danske Bank Follow us on Twitter Italy is the big worry expect the EU to get tougher on its debt and banking problems. Greece has become a political issue between the EU and the IMF but do not expect a summer-205 scenario. In our view, the ECB is unlikely to raise rates before late 208 at the earliest. @Danske_Research US wage growth has stabilised around 2.7% y/y Danmarks Nationalbank intervened slightly in February Editor Source: US Bureau of Economic Analysis Source: Eurostat, Danske Bank Markets Senior Analyst Kristoffer Kjær Lomholt +45 45 2 82 29 klom@danskebank.com Important disclosures and certifications are contained from page 3 of this report. www.danskeresearch.com

Market movers Global In the US, the coming week brings the labour market report for March on Friday. The labour market has been in good shape over the past two months and we expect this trend to continue. The service sector is benefiting from the general economic upturn driven by domestic demand. Manufacturing employment has begun to recover and we expect this to continue, as both ISM manufacturing and Markit PMI continue to stay at solid levels. However, the March numbers will probably be affected significantly by the very harsh weather conditions in the middle of March. We forecast a total of 60,000 new jobs were created in March of which the service sector provided 60,000 and manufacturing 5,000. We expect the weather conditions affected construction employment primarily, which likely fell in March. We expect the average hourly earnings increased 0.2% m/m which would mean an increase of 2.7% y/y. We furthermore expect the unemployment rate remained at 4.7% after last month s decrease. As a warm-up for the labour market report, ADP employment for March is due on Wednesday. Although not a perfect predictor, ADP tends to give a relatively good idea of what to expect from the official jobs report. On Monday, ISM manufacturing for March is due. ISM manufacturing has soared over the past couple of months, emphasising that there is progress in manufacturing. In the same period, we have seen a divergence between ISM and PMI manufacturing emerge. Based on this, one would argue that ISM manufacturing could be in for a fall. However, regional manufacturing indices continued rising in March. Thus, there are mixed signals concerning the March ISM figures. We estimate that the ISM manufacturing fell back slightly to 56.0 in March. Even if it turns out that it increased further in March, we believe it is about to peak. Post crisis, ISM has only very rarely reached the current level and our models point towards a reversal. Wage growth has stabilised around 2.7% y/y Source: U.S. Bureau of Labor Statistics (BLS) Mixed signals for ISM manufacturing in March Source: Macrobond Financial The coming week also brings a number of speeches by FOMC members and we also get the minutes from the 4-5 March FOMC meeting. We will in particular look for discussions on the Fed s desire to begin shrinking its balance sheet, as Fed Chair Janet Yellen said at the press conference that the FOMC members discussed it at the meeting In the euro area, the unemployment figure for February is due for release on Monday. From its January level of 9.6%, we expect unemployment fell to 9.5%, continuing its steady decline since 203. Business sentiment suggests that unemployment will continue declining as the PMI employment indicator especially within services showed strength in January and February. On Tuesday, the euro area retail sales figure for February is due out. After three months of monthly declines, we estimate retail sales showed a modest monthly increase in February of 0.5%. While the labour market continues to show progress, consumer confidence declined in February and consumption growth is projected to slow in 207, as there will be headwind from weaker real wage growth due to the pickup in inflation. Based on this, retail sales should not be growing significantly in coming months. The ECB minutes from the March meeting are due to be published on Thursday. As we noted last week, market participants have started to speculate on rate hikes before a termination of the QE programme. The exit speculations were fuelled by a hawkish twist at the ECB meeting in March and focus will be on how dovish or hawkish the discussion was within the Governing Council. Although the ECB maintained the forward guidance with rates to remain at present or lower levels for an extended period of time, and well past the horizon of our net asset purchase, Mario Draghi added that the probability of lower policy rates has decreased. It is still our expectation that the ECB will not hike before the termination of the QE programme, which we expect to be extended into next year. See more in Research: Euro area reflation story ending, 29 March 207. Retail sales growth should be modest Source: Eurostat, Danske Bank Markets 2 3 March 207 www.danskeresearch.com

Also on Thursday, German factory orders for February are due out. Recent months have showed great volatility in factory orders, with the latest figure being a 7.2% monthly drop in January. We estimate a monthly increase of 4.2% following the weak January figure. German industrial production is due to be released on Friday. Following the weak factory orders in January, we estimate industrial production for February will show a drop of 2.5%. In the UK, PM Theresa May triggered Article 50 this week, meaning that the Brexit negotiations have officially started and we are likely to begin to get more headlines about what to expect of the negotiations in coming weeks and months. For more information on what happens next, see Brexit Monitor No. 27 - Brexit negotiations set to start today - what now? 29 March. In terms of economic data releases next week, look out for the PMIs for March. Especially the PMI service index on Wednesday will attract attention after it declined in both January and February, suggesting GDP growth has slowed in Q 7 to around 0.3-0.4% q/q down from 0.7% q/q. The service confidence indicator suggests the PMI service index could have moved up marginally to 53.7 in March, which, however, would not change the impression we have that growth slowed at the beginning of 207. PMI manufacturing is due out on Monday and given the corresponding index for the euro area continued higher in March, we expect an increase to 55.2. Note, the NIESR GDP estimate for March is due out on Friday the indicator is usually a good predictor for actual GDP growth (first release). In China, focus will be on Caixin PMI for the manufacturing sector on Monday. The official PMI manufacturing on Friday surprised slightly on the upside and pointed to continued strong growth in March. We look for a rise to 52.0 from 5.7 in February. A strong housing market kept the Chinese growth picture upbeat at the beginning of 207 but exports are providing strong support currently due to the weaker yuan and global recovery. We continue to look for a gradual weakening of Chinese growth this year as China has moved from the accelerator to the break this year to stem a brewing housing bubble and to dampen inflationary pressures. UK PMIs for January and February indicate growth has slowed in Q Source: ONS, Markit Economics PMI likely to be at a peak Source: Macrobond Financial 3 3 March 207 www.danskeresearch.com

Scandi In Denmark, the coming week brings currency reserves data on Tuesday. The krone was riding high against the euro at the beginning of March, so the market will keep a close eye on whether the central bank intervened during the month. Housing prices for January follow on Wednesday and bankruptcies and forced sales for March on Thursday. Rounding off the week on Friday will be February data for industrial production, which has been highly volatile recently but has been trending up since spring last year. Nationalbank intervened slightly in February In Sweden, the week ahead has a few interesting sets of data to ponder. First out is PMI (Monday, at 08:30 CEST), one of our least favoured indicators (it has no predictive abilities whatsoever) that nonetheless receives a great deal of financial market attention. Then, on Wednesday (at 09:30 CEST), Statistics Sweden (SCB) is due to publish February industrial data, which is one of our favourite but, alas, volatile indicators. We have no strong view on this particular number, but another decent outcome for production would rhyme well with our estimates for GDP Q 7. In Norway, the week brings several indicators which will reveal whether industrial activity has recovered further. We have seen various signs of activity in oil-related industries picking up, and the combination of stronger global growth and an unexpectedly weak krone should pave the way for stronger growth in exports. The PMI also climbed to 52.6 in February, so we expect industrial production to gain 0.3% m/m in February, which would confirm that the negative trend in manufacturing since 204 is at an end. It would also mean that industrial production made a solid contribution to GDP in Q and confirm that growth is approaching the trend rate. PMI data for March is also due to be released on Monday. Source: Statistics Denmark If you try, you see what trend? Source: Statistics Sweden, Danske Bank calculations Industrial activity on the up Source: Macrobond Financial, Danske Bank Market movers ahead Global movers Event Period Danske Consensus Previous Mon 03-Apr 3:45 CNY Caixin PMI manufacturing Index Mar 5.7 5.7 6:00 USD ISM manufacturing Index Mar 56.0 57.0 57.7 Tue 04-Apr Wed 05-Apr - PLN Polish central bank rate decision %.50%.50%.50% 0:30 GBP PMI services Index Mar 53.5 53.3 4:5 USD ADP employment 000 Mar 80 298 6:00 USD ISM non-manufacturing Index Mar 57.0 57.6 20:00 USD FOMC minutes from 4-5 March meeting Fri 07-Apr 4:30 USD Unemployment % Mar 4.7% 4.7% 4.7% 4:30 USD Average hourly earnings, non-farm m/m y/y Mar 0.2% 2.7% 0.3% 2.8% 0.2% 2.8% 4:30 USD Non farm payrolls 000 Mar 60 74 235 Scandi movers During the week Mon 03-Apr 9:00 NOK PMI manufacturing Index Mar 52.4 52.6 Tue 04-Apr 6:00 DKK Currency reserves DKK bn Mar 470.0 466.6 Wed 05-Apr 9:30 SEK Service production m/m y/y Feb.% 7.7% Fri 07-Apr 8:00 NOK Manufacturing production m/m y/y Feb 0.3% 0.2% -0.9% Source: Bloomberg, Danske Bank Markets 4 3 March 207 www.danskeresearch.com

Global Macro and Market Themes On the road in Brussels Last week, we were on a client study trip to Brussels titled EU s future where is Europe heading, during which we met commissioners, top EU bureaucrats and populist parties. Below, we discuss our brief takeaways from the trip. The future of the EU. The EU institutions favour a more flexible, multi-speed EU, which also appears to be the wish of the current leaders of the the big four. Treaties allow for a multi-speed Europe but there are limits to this approach, given the risk of a messy situation where different rules and initiatives apply to different countries. The EU reform progress will depend on the member states and hence on the new leaders in France, Germany and (to a lesser extent) Italy. There is wide acknowledgement that nothing will happen before the German election in September. The bigger issue is that the EU needs a stronger France to balance the influence of Germany. Historically, France has been important in creating new ideas and been the voice of the south to counterweigh the influence of Germany but this has not been the case over the past 0 years due to a weak economy and weak leaders. The upcoming French election is very important in this regard. Brexit confrontation. There is a clear conflict between on the one hand the EU s priority to first agree on the guiding principles on Brexit, including the exit bill, citizens rights and external borders, and on the other hand the UK s insistence on parallel negotiations, with the divorce agreement being negotiated alongside a new free trade agreement. The negotiating guidelines with the member states will be adopted at the European Council on 29 April. Now the UK has triggered Article 50, it will be interesting to see whether the EU is still able to speak with one voice, which it has done successfully until now. Key points The EU favours a multi-speed Europe progress will depend on upcoming elections. Italy is the big worry expect the EU to get tougher on its debt and banking problems. Greece has become a political issue between the EU and the IMF but do not expect a summer-205 scenario. The ECB is unlikely to raise rates before late 208 at the earliest, in our view. Italy is the biggest worry. The EU may turn tougher on Italy s debt and banking problems. The ECB will not bail out Italy and the scale of the challenges Italy faces is too large to be taken care of by the European Stability Mechanism. Hence, the EU appears to have the view that Italy has to deal with its challenges before the market forces it to do so. On debt, the Italian authorities may be forced by the EU into a corrective action plan under the excessive debt procedure. Chart. Bond scarcity concerns are larger in Sweden than in the eurozone Chart 2. Swedish banks seem to be living fine with negative rates Source: Various central banks, Danske Bank Source: Macrobond Financial, Danske Bank 5 3 March 207 www.danskeresearch.com

On the banking challenges, the EU authorities want Italy to take a more comprehensive approach instead of the sequential approach that has been adopted so far. The EU is likely to take a leading role in the resolution of non-performing loans in European banks, particularly in Italy, Cyprus and Greece. The discussions will kick off at a Eurogroup meeting in Malta in early April. Greece. The conflict is now between the EU and the IMF, as Greece has performed a lot better than expected. However, the situation should not be compared to summer 205, as there is a desire and willingness to find a solution before Greece s large debt repayments in July. European nations are not willing to go back to the brink and the Greek government wants to do everything it can to get a deal. Chart 3: Italian and Portuguese banks are underperforming Source: Various central banks, Danske Bank ECB s exit policy. There is an ongoing debate about raising interest rates before ending QE. EU economists (not ECB Governing Council members) argue in favour of moving first on rates. Regarding the last point, there has recently been discussion about central banks exit policies, particularly for the ECB but also in Sweden. Our base case has been that the ECB and the Riksbank will maintain an ultra-easy policy but their exit strategies may differ. The liquidity situation in Swedish government bond markets has become so poor that we believe the Riksbank will announce in April an end to this QE programme in June (see Chart ) but it will lower the rate path as the Swedish banks have been adjusting well to negative rates (see Chart 2). On the contrary, in the euro area, the argument goes that the ECB should raise rates given the poor state of the banking sector. It is correct that banks in Italy and Portugal in particular are under great strain (see Chart 3). However, it is mainly in Italy that lending margins are under significant pressure (see Chart 4). Hence, it is not clear to us that the ECB should start raising interest rates just to support the banking sector. Clearly, March euro area inflation supports our view and we believe the ECB will announce an extension of its QE programme in September. Chart 4: It is primarily Italian banks where interest rate margins have collapsed Source: Various central banks, Danske Bank Global market views Source: Danske Bank 6 3 March 207 www.danskeresearch.com

Scandi Update Denmark growing business confidence The week s business confidence data for March revealed that manufacturers are happier than they have been for some time. The indicator is still far from stellar but is at its highest for almost three years. It is worth noting that manufacturers are not reporting growing problems with labour shortages or other bottlenecks despite the economy now being further and further into the upturn. This is still only an issue for the construction sector, and even there a lack of demand is seen as a bigger constraint on production than shortages of labour. The week s unemployment figures showed an increase of,600 people in February. This was presumably due to expansion of the labour force rather than a decline in employment. Over the past four months, 7,000 immigrants previously on integration benefit have been reclassified as available to work, and many will therefore now be included in the jobless statistics. Finally, the week brought heavily revised national accounts data for Q4 6, with GDP growth adjusted up from.% to.3% for 206 as a whole, due mainly to a solid Q4. Manufacturers more upbeat Source: Statistics Denmark Sweden surprisingly expected Over the past week, we have received a lot of interesting economic data, including retail sales, trade balance, NIER s business and consumer confidence surveys etc. However, not one of the outcomes has the power to change real or financial economic directions, although an interesting picture nonetheless emerges. After a period of stronger international and domestic data, markets and analysts expectations on the Swedish economy have clearly been revised upwards. As our readers should know, we have remained unimpressed and considered it to be much of a fluke, heralding from currency movements and high hopes on fiscal policy stimuli. This week s data, if anything, underlined our case, with most outcomes a tad weaker than expected. Importantly, much of the data was hard, real data and it shows little evidence of an acceleration. Hence, we stick to our views. Sweden, a country full of surprises Source: Macrobond Financial, Danske Bank calculations Norway the labour market is tightening The March figures from NAV revealed a further drop in the unemployment rate. The number of gross unemployment fell by 900 people m/m to the lowest level since September 205. However, many are suggesting that the fall in unemployment is down to a drop in the labour supply, because employment is actually decreasing. We are far from convinced by this interpretation of the data. Employment as measured in the national accounts is clearly rising, with an increase of almost,000 people y/y in Q4 6. In the same period, the LFS showed a decrease in employment of 27,000 people. Measured from the employer side, the national accounts job data is more reliable than the LFS, which is a survey of a panel of households. Furthermore, other labour market indicators including the employment index in Norges Bank's regional network survey and the PMI all point to higher employment, as would be expected when growth picks up. This is supported by the number of vacancies registered with the Norwegian Labour and Welfare Administration (NAV), which has been rising fast throughout the past year. We are therefore convinced that unemployment is actually falling because employment is rising, which means that the labour market is gradually growing tighter. Unemployment is falling Source: Macrobond Financial, Danske Bank 7 3 March 207 www.danskeresearch.com

Latest research from Danske Bank Markets 3/3 Flash Comment: Official China PMI points to continued strength in March Chinese official PMI manufacturing surprised on the upside, rising to 5.8 (consensus 5.7, previous 5.6). 29/3 Brexit Monitor No. 27: Brexit negotiations set to start today - what now? PM Theresa May set to trigger Article 50 today - this presentation outlines future events to look out for. 29/3 Research: Euro area reflation story ending The rise in inflation to the ECB's 2.0% target for the first time since 203 implies that market expectations have turned in favour of expecting a more hawkish stance from the ECB 28/3 Nordic Outlook: Economic and financial trends Denmark: a peculiar upturnthe fairly strong recovery continues but it is not resulting in much top-line growthfor businesses. 8 3 March 207 www.danskeresearch.com

Macroeconomic forecast Macro forecast, Scandinavia Year GDP cons. Private cons. Fixed inv. Stock build. 2 Exports Imports Inflation Unemploym. 3 budget 4 debt 4 Current acc. 4 Denmark 206.3.9-0. 5.2-0.4.7 2.4 0.3 4.2-0.9 37.8 8. 207.7 2.0 0. 4.2 0.0 4.4 4.8.2 4.3 -.2 36.7 7.8 208.7 2. 0.8 3.5 0.0 2.7 3.4.5 4.2-0.6 35. 7.7 Sweden 206 3.3 2.2 3. 5.9 0. 3.4 3.7.0 6.9 0.7 42. 4.7 207.8.3.3 2.2-0.5 3.7 2.0.3 7.0 0.2 39.9 5.0 208.9.4 2.0 2. 0. 3.6 3.6.2 6.9 0.0 39.3 5.0 Norway 206 0.8.6 2.3 0.5 0.3 -.2 0.3 3.6 3.0 - - - 207.8 2..7.3 0.0.4.2 2.3 2.8 - - - 208 2.2 2.3.6 2.0 0.0.6 2.2.5 2.7 - - - Macro forecast, Euroland Year GDP cons. Private cons. Fixed inv. Stock build. 2 Exports Imports Inflation Unemploym. 3 budget 4 debt 4 Current acc. 4 Euroland 206.7.9.8 2.5-2.7 3.4 0.2 0.0 -.7 9.5 3.6 207.6.4.2.8-3.8 3.9.6 9.4 -.4 90.4 3.2 208.6.. 3.6-3.6 4.0.2 8.8 -.4 89.2 3. Germany 206.8.8 4.0 2. - 2.4 3.6 0.4 4.2 0.6 68.2 8.7 207.9.3 2.5 2.4-3.9 5.0.7 3.8 0.4 65.5 8.3 208.9.4.9 4.3-4.0 4.8.5 3.8 0.4 62.9 8.0 France 206..8.4 2.8 -.2 3.6 0.3 0.0-3.3 96.4-2. 207..2.2.9-3.3 3.8. 9.9-2.9 96.8-2.3 208.2.0. 3.0-3.0 3.5.3 9.7-3. 97.4-2.6 Italy 206.0.3 0.6 3. - 2.6 3. -0..7-2.3 32.8 2.7 207.0 0.8 0.7 3.3-4.3 4.8.5.5-2.4 33.3 2. 208.3 0.8 0.7 3.6-3.5 3.5.2.4-2.6 33.2.8 Spain 206 3.2 3.2 0.8 3. - 4.4 3.3-0.3 9.6-4.7 99.7.8 207 2.5 2.3 0.8 2.7-3.8 2.9 2. 7.7-3.5 00.0.7 208 2.2 2.0.2 4.7-3.6 4.6.0 6. -2.9 99.7.6 Finland 206.4 2.0 0.5 5.2-0.5 2.5 0.4 8.8 -.9 63.6 -. 207.5.0-0. 3.5-3.0 2.5.2 8.3-2.3 64.7 -. 208.5.0 0.2 2.5-4.0 3.0.4 8.0-2.0 65.0-0.9 Macro forecast, Global Year GDP Private cons. cons. Fixed inv. Stock build. 2 Exports Imports Inflation Unemploym. 3 budget 4 debt 4 Current acc. 4 USA 206.6 2.6 0.8 0.4-0.4 0.7 0.7.3 4.9-2.6 05-2.7 207 2.2 2.2 0.6 2.8 0. 3.2 2.3 2.4 4.7-2.9 05-2.9 208 2.8 2.0 2.9 6. 0.0 3.0 3.0 2.5 4.4-2.8 03-3.3 China 206 6.7 - - - - - - 2.0 4. -3.0 46.3 2.4 207 6.6 - - - - - - 2.0 4.3-3.3 49.9 2. 208 6.3 - - - - - - 2.0 4.3-3.0 53.3.5 UK 206 2.0 2.8 0.8 0.9 0.5.0 2.7 0.7 4.9-3.6 88.7-5.0 207.2.7 0.2 0.3 0.3.7 2.4 2.3 5.0-2.9 89.2-4.9 208.0.0 0.4 0.7 0.0 2.8 2.0 2.6 5.3-2.2 88.7-3.3 Source: OECD and Danske Bank. ) % y/y. 2) % contribution to GDP growth. 3) % of labour force. 4) % of GDP. 9 3 March 207 www.danskeresearch.com

Sweden Financial forecast Bond and money markets Source: Danske Bank Markets Currency vs USD Currency vssek USD 3-Mar.00.5.59 2.34 08.7-877.5 +3m.00.47.70 2.45 08.0-870.4 +6m.25.58.75 2.65 0.0-845.5 +2m.75.95 2.25 3.00 4.0-807.0 EUR 3-Mar 0.00-0.33-0.0 0.82-08.7 953.4 +3m 0.00-0.35-0.0 0.85-08.0 940.0 +6m 0.00-0.35-0.0.00-0.0 930.0 +2m 0.00-0.35 0.00.30-4.0 920.0 JPY 3-Mar -0.0 0.02 0.05 0.25 9.8 0.2 7.96 +3m -0.0 - - - 24.2 5.0 7.57 +6m -0.0 - - - 29.8 8.0 7.6 +2m -0.0 - - - 34.5 8.0 6.84 GBP 3-Mar 0.25 0.34 0.64.24 86.5 25.6 02.3 +3m 0.25 0.35 0.60.25 87.0 24. 080.5 +6m 0.25 0.35 0.60.55 86.0 27.9 08.4 +2m 0.25 0.36 0.60.85 86.0 32.6 069.8 CHF 3-Mar -0.75-0.73-0.60 0.9 07.0 98.5 890.8 +3m -0.75 - - - 08.0 00.0 870.4 +6m -0.75 - - -.0 00.9 837.8 +2m -0.75 - - - 4.0 00.0 807.0 DKK 3-Mar 0.05-0.25 0.06.08 744.0 684.8 28.2 +3m 0.05-0.25 0.05.0 744.0 688.9 26.3 +6m 0.05-0.25 0.05.25 744.0 676.4 25.0 +2m 0.05-0.25 0.5.55 744.0 652.6 23.7 SEK 3-Mar -0.50-0.50-0.26.5 953.4 877.5 00.0 +3m -0.50-0.50-0.40.35 940.0 870.4 - +6m -0.50-0.50-0.40.45 930.0 845.5 - +2m -0.50-0.50-0.30.60 920.0 807.0 - NOK 3-Mar 0.50 0.96.2.96 96.4 843.5 04.0 +3m 0.50 0.90.25 2.0 890.0 824. 05.6 +6m 0.50 0.90.35 2.30 870.0 790.9 06.9 +2m 0.50 0.90.60 2.60 870.0 763.2 05.7 Equity markets Regional Risiko profil 3 mdr. Pris trend 3 mdr. Pris trend 2 mdr. Regionale rekommendationer USA (USD) Growth boost: fisc. expansion, tax cuts, infl./growth-impulse Medium 5-0% 0-5% Overweight Emerging markets (local ccy) Hurt by stronger USD and increased protectionism Medium -5-0% -5-+5% Underweight Japan (JPY) Valuation and currency support Medium 5-0% 0-5% Overweight Euro area (EUR) Political uncertainty ahead due to French election Medium 0-5% 0-5% Underweight UK (GBP) Currency support, stronger infl. exp. off-set Brexit negativity Medium 3-8% 5-0% Neutral Nordics (local ccy) Currency support on earnings, continued domestis demand Medium 3-8% 5-0% Neutral Commodities Key int. rate 3m interest rate 2-yr swap yield 0-yr swap yield Currency vs EUR 207 208 Average 27-Mar Q Q2 Q3 Q4 Q Q2 Q3 Q4 207 208 NYMEX WTI 48 53 53 57 59 60 60 6 6 56 6 ICE Brent 50 55 55 57 59 60 60 6 6 57 6 Copper 5,804 5,850 5,900 5,950 6,000 6,025 6,050 6,075 6,00 5,925 6,063 Zinc 2,83 2,725 2,600 2,500 2,400 2,300 2,300 2,300 2,300 2,556 2,300 Nickel 9,870 0,500,000,400,500,600,700,800,900,00,750 Aluminium,939,825,800,800,800,800,800,80,820,806,808 Gold,259,200,50,50,60,70,80,90,200,65,85 Matif Mill Wheat 67 70 64 68 70 70 69 68 68 68 69 Rapeseed 40 420 440 440 430 425 425 425 425 433 425 CBOT Wheat 423 435 465 500 50 520 530 540 550 478 535 CBOT Soybeans 976,050,00,00,00,25,25,50,50,088,38 0 3 March 207 www.danskeresearch.com

Calendar Key Data and Events in Week 4 During the week Period Danske Bank Consensus Previous Monday, April 3, 207 Period Danske Bank Consensus Previous - USD Total vechicle sales m Mar 7.40 7.47 :30 JPY Nikkei Manufacturing PMI, final Index Mar 52.6 :50 JPY Tankan large manufacturers index (outlook) Index st quarter 4.0 0.0 8.0 :50 JPY Tankan large non-manufacturers index (outlook) Index st quarter 9.0 8.0 6.0 3:45 CNY Caixin PMI manufacturing Index Mar 5.7 5.7 8:30 SEK PMI manufacturing Index Mar 60.9 9:00 NOK PMI manufacturing Index Mar 52.4 52.6 9:5 ESP PMI manufacturing Index Mar 54.8 9:45 ITL PMI manufacturing Index Mar 55.6 55.0 9:50 FRF PMI manufacturing, final Index Mar 53.4 53.4 9:55 DEM PMI manufacturing, final Index Mar 58.3 58.3 0:00 EUR PMI manufacturing, final Index Mar 56.2 56.2 0:30 GBP PMI manufacturing Index Mar 55.0 54.6 :00 EUR PPI m/m y/y Feb 4.4% 0.3% 3.5% 0.7% :00 EUR Unemployment % Feb 9.5% 9.5% 9.6% 5:30 CAD RBC manufacturing PMI Index Mar 54.7 5:45 USD Markit PMI manufacturing, final Index Mar 53.4 6:00 USD Construction spending m/m Feb.2% -.0% 6:00 USD ISM manufacturing Index Mar 56.0 57.0 57.7 6:30 USD Fed's Dudley (voter, dovish) speaks 2:00 USD Fed's Harker (voter, hawkish) speaks 23:00 USD Fed's Lacker (non-voter, hawkish) speaks Tuesday, April 4, 207 Period Danske Bank Consensus Previous 6:30 AUD Reserve Bank of Australia rate decision %.50%.50%.50% 0:30 GBP PMI construction Index Mar 52.5 52.5 :00 EUR Retail sales m/m y/y Feb 0.5% 0.2% 0.8% -0.%.2% 4:30 USD Trade balance USD bn Feb -46.5-48.5 6:00 DKK Currency reserves DKK bn Mar 470.0 466.6 6:00 USD Core capital goods orders % Feb -0.% 22:30 USD Fed's Tarullo (voter, dove) speaks Wednesday, April 5, 207 Period Danske Bank Consensus Previous - PLN Polish central bank rate decision %.50%.50%.50% 2:30 JPY Markit PMI services Index Mar 5.3 8:30 SEK PMI services Index Mar 59.8 9:00 DKK House prices m/m y/y Jan 9:5 ESP PMI services Index Mar 57.7 9:30 SEK Industrial production s.a. m/m y/y Feb.0% 2.4% 2.0%.3% 9:30 SEK Service production m/m y/y Feb.% 7.7% 9:30 SEK Industrial orders m/m y/y Feb -2.6% 0.0% 9:45 ITL PMI services Index Mar 54.7 54. 9:50 FRF PMI services, final Index Mar 58.5 58.5 9:55 DEM PMI services, final Index Mar 55.6 55.6 0:00 EUR PMI composite, final Index Mar 56.7 56.7 0:00 EUR PMI services, final Index Mar 56.5 56.5 0:30 GBP PMI services Index Mar 53.5 53.3 4:5 USD ADP employment 000 Mar 80 298 5:45 USD Markit PMI service, final Index Mar 52.9 6:00 USD ISM non-manufacturing Index Mar 57.0 57.6 6:30 USD DOE U.S. crude oil inventories K 867 20:00 USD FOMC minutes from 4-5 March meeting Source: Danske Bank Markets 3 March 207 www.danskeresearch.com

Calendar continued Thursday, April 6, 207 Period Danske Bank Consensus Previous 3:45 CNY Caixin PMI service Index Mar 52.6 7:00 JPY Consumer confidence Index Mar 43.4 43. 8:00 DEM Factory orders m/m y/y Feb 4.2% 3.4% 3.5% -7.4% -0.8% 9:00 DKK Forced sales (s.a.) Number Mar 9:00 DKK Bankruptcies (s.a.) Number Mar 9:5 CHF CPI m/m y/y Mar 0.2% 0.5% 0.5% 0.6% 9:30 SEK Average house prices SEK m Mar 2.938 3:30 EUR ECB account of the monetary policy meeting 4:30 USD Initial jobless claims 000 5:30 USD Fed's Williams (non-voter, neutral) speaks Friday, April 7, 207 Period Danske Bank Consensus Previous - EUR S&P may publish France's debt rating - CNY Foreign exchange reserves USD bn Mar 3007.5 3005. 2:00 JPY Labor cash earnings y/y Feb 0.5% 0.3% 7:00 JPY Leading economic index, preliminary Index Feb 04.6 04.9 7:45 CHF Unemployment % Mar 3.3% 3.3% 8:00 DEM Industrial production m/m y/y Feb 2.5% -0.3% 0.6% 2.8% 0.0% 8:00 DEM Trade balance EUR bn Feb 7.4 4.9 8:00 NOK Manufacturing production m/m y/y Feb 0.3% 0.2% -0.9% 8:00 NOK Industrial production m/m y/y Feb 3.4%.3% 8:45 FRF Industrial production m/m y/y Feb 0.6%.3% -0.3% -0.4% 9:00 CHF SNB balance sheet, intervention CHF bn Mar 668.2 9:00 DKK Industrial production m/m Feb -5.3% 9:30 SEK Budget balance SEK bn Mar 42.9 0:30 GBP Construction output m/m y/y Feb 0.% 2.0% -0.4% 2.0% 0:30 GBP Industrial production m/m y/y Feb 0.2% 3.7% -0.4% 3.2% 0:30 GBP Manufacturing production m/m y/y Feb 0.4% 3.9% -0.9% 2.7% 0:30 GBP Trade balance GBP mio. Feb -2200-966 4:00 GBP NIESR GDP estimate q/q Mar 0.6% 0.6% 4:30 USD Unemployment % Mar 4.7% 4.7% 4.7% 4:30 USD Average hourly earnings, non-farm m/m y/y Mar 0.2% 2.7% 0.3% 2.8% 0.2% 2.8% 4:30 USD Non farm payrolls 000 Mar 60 74 235 4:30 CAD Net change in full time employment 000 Mar 05. 2:00 USD Consumer credit USD bn Feb.0 8.8 The editors do not guarantee the accurateness of figures, hours or dates stated above For furher information, call (+45 ) 45 2 85 22. Source: Danske Bank Markets 2 3 March 207 www.danskeresearch.com

Disclosures This research report has been prepared by Danske Bank Markets, a division of Danske Bank A/S ( Danske Bank ). The author of the research report is Kristoffer Kjær Lomholt, Senior Analyst. Analyst certification Each research analyst responsible for the content of this research report certifies that the views expressed in the research report accurately reflect the research analyst s personal view about the financial instruments and issuers covered by the research report. Each responsible research analyst further certifies that no part of the compensation of the research analyst was, is or will be, directly or indirectly, related to the specific recommendations expressed in the research report. Regulation Danske Bank is authorised and subject to regulation by the Danish Financial Supervisory Authority and is subject to the rules and regulation of the relevant regulators in all other jurisdictions where it conducts business. Danske Bank is subject to limited regulation by the Financial Conduct Authority and the Prudential Regulation Authority (UK). Details on the extent of the regulation by the Financial Conduct Authority and the Prudential Regulation Authority are available from Danske Bank on request. The research reports of Danske Bank are prepared in accordance with the recommendations of the Danish Securities Dealers Association. Conflicts of interest Danske Bank has established procedures to prevent conflicts of interest and to ensure the provision of high-quality research based on research objectivity and independence. These procedures are documented in Danske Bank s research policies. Employees within Danske Bank s Research Departments have been instructed that any request that might impair the objectivity and independence of research shall be referred to Research Management and the Compliance Department. Danske Bank s Research Departments are organised independently from and do not report to other business areas within Danske Bank. Research analysts are remunerated in part based on the overall profitability of Danske Bank, which includes investment banking revenues, but do not receive bonuses or other remuneration linked to specific corporate finance or debt capital transactions. Financial models and/or methodology used in this research report Calculations and presentations in this research report are based on standard econometric tools and methodology as well as publicly available statistics for each individual security, issuer and/or country. Documentation can be obtained from the authors on request. Risk warning Major risks connected with recommendations or opinions in this research report, including a sensitivity analysis of relevant assumptions, are stated throughout the text. Expected updates None. Date of first publication See the front page of this research report for the date of first publication. General disclaimer This research has been prepared by Danske Bank Markets (a division of Danske Bank A/S). It is provided for informational purposes only. It does not constitute or form part of, and shall under no circumstances be considered as, an offer to sell or a solicitation of an offer to purchase or sell any relevant financial instruments (i.e. financial instruments mentioned herein or other financial instruments of any issuer mentioned herein and/or options, warrants, rights or other interests with respect to any such financial instruments) ( Relevant Financial Instruments ). The research report has been prepared independently and solely on the basis of publicly available information that Danske Bank considers to be reliable. While 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 Danske Bank, its affiliates and subsidiaries accept no liability whatsoever for any direct or consequential loss, including without limitation any loss of profits, arising from reliance on this research report. The opinions expressed herein are the opinions of the research analysts responsible for the research report and reflect their judgement as of the date hereof. These opinions are subject to change, and Danske Bank does not undertake to notify any recipient of this research report of any such change nor of any other changes related to the information provided in this research report. This research report is not intended for, and may not be redistributed to, retail customers in the United Kingdom or the United States. This research report is protected by copyright and is intended solely for the designated addressee. It may not be reproduced or distributed, in whole or in part, by any recipient for any purpose without Danske Bank s prior written consent. 3 3 March 207 www.danskeresearch.com

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