Important disclosures and certifications are contained from page 14 of this report. www.danskeresearch.com

Investment Research — General Market Conditions

Market movers ahead

In the US, we expect a rebound in key non-defence durable goods orders ex. aircraft.

US Markit PMI remains at an elevated level and we expect a correction.

Euro area PMIs are expected to increase signalling stronger economic activity.

Greece likely to remain in the spotlight at the upcoming Eurogroup meeting.

In the UK, minutes from the MPC’s April meeting is released. We will look for

comments on sterling, wage growth and core inflation.

In China, it is still too early to call the bottom for China’s manufacturing PMI.

In Sweden, we expect another lacklustre outcome from the labour force survey.

Global macro and market themes

We believe we are at a low point in the global business cycle.

US growth to recover from here.

Stock markets playing recovery.

Fed members still signal hike in June-September window.

We see German yields falling still as more maturities go below -0.2%.

We expect EUR/USD to decline on better US data.

Focus

Research UK: We have moved the first BOE hike to November 15

Research: Finnish parliamentary polls point to a new government

FX Forecast Update: Keep calm and carry on

Euro PMIs to increase further US Markit PMI will give an indication of

what to expect in the US

Source: Markit Economics Source: Macrobond Financial

17 April 2015

Editors Allan von Mehren +45 4512 8055 alvo@danskebank.dk Steen Bocian +45 45 12 85 31 steen.bocian@danskebank.dk

Weekly Focus

We continue to look for robust growth in the euro area

Contents

Market movers ................................................. 2

Global Macro and Market Themes ..... 5

Scandi Update................................................... 8

Latest research from Danske Bank

Markets ................................................................. 9

Macroeconomic forecast ....................... 10

Financial forecast ........................................ 11

Calendar ............................................................ 12

Financial views

Source: Danske Bank

Major indices

17-Apr 3M 12M

10yr EUR swap 0.44 0.70 0.90

EUR/USD 108 101 108

ICE Brent oil 64 70 77

17-Apr 6M 12-24M

S&P500 2105 0-5% 5-8%

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Market movers

Global

US: the data calendar for the coming week is relatively light and we are in the black

out period for FOMC speeches ahead of the 28-29 April FOMC meeting.

The most important data should be durable goods orders for March and the Markit

flash manufacturing PMI for April. In particular data on the key non-defence durable

goods orders ex. aircraft has been extraordinarily weak lately with the average growth

rate over the past three months at -8% annualised. We expect part of the weakness to

have been caused by temporary factors and in line with consensus expect a rebound.

The Markit manufacturing PMI remains at an elevated level and has improved in the

past two months contrary to other data related to the manufacturing sector. Hence it

could be time for a correction lower in the index but the extent of decline will be

important as it gives an indication of how severe is the current soft patch in the US.

On top of these releases, we will get March data on new and existing home sales. The

NAHB index rebounded in April suggesting that housing market activity is

improving. However, given the spike in new home sales in February we and

consensus look for a slight set-back in March. For existing home sales we look for an

increase of 3.4% which would take the annualised pace of sales to 5.05 million.

Euro area PMIs are expected by us to continue trending upwards signalling stronger

economic activity. Regarding PMI manufacturing, the order-inventory balance

strengthened in March and the weaker currency is still expected to support the

manufacturing sector. Especially, the German manufacturing PMI performed well,

whereas France has not seen the same uptrend as other euro area countries. PMI

services has also strengthened in recent months and future business expectations have

risen. The increase in consumers’ real purchase power and overall outlook for

household demand is supportive of some further increases in PMI services.

We expect German ZEW expectations to decline slightly in April after it has risen

substantially since October last year on the back of ECB stimulus and better economic

growth momentum. Our forecast also reflects that the share of respondents who

believe in either further improvements or worsening is now looking rather stretched.

In addition, the German Sentix expectations declined in April and this is often a good

leading indicator for the ZEW figure.

German IFO expectations are expected to increase further, but there is downside risk

to our forecast as it has also reached a rather high level. The index already points to

strong GDP growth and even if the IFO expectations decline a little this would still

suggest a solid expansion in the German economy in the first half of 2015.

Finally, we forecast that euro area consumer confidence will increase further.

Consumer sentiment is currently at the highest level since 2007 but the upward trend

has been broad based among components and we believe it can continue.

The upcoming Eurogroup meeting is also likely to attract attention and focus may

well be on the ongoing discussion of whether or not Greece will have come up with

sufficient economic reform for euro area creditors to be willing to release more funds.

According to media reports the parties are still some way from reaching an agreement

and negotiations are likely to continue at the Eurogroup meeting on 11 May – the day

before the next large payment to the IMF is due.

Markit manufacturing PMI poised for a

correction

Source: Markit and ISM

PMI manufacturing to increase further

Source: Macrobond Financial

German expectations at high levels

Source: Macrobond Financial

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In the UK, the minutes from the MPC’s April meeting are due to released 22 April.

We expect that the committee voted unanimously in favour of keeping the Bank Rate

and the stock of purchased assets unchanged at 0.50% and GBP375bn, respectively.

We will look for any comments on sterling as the minutes from the March meeting

revealed that the MPC has become more worried about the appreciation of sterling in

recent months. As usual, look for comments on wage growth and core inflation as

both have been low. Note that we have postponed our expectations for the first Bank

Rate hike three months from August 2015 to November 2015, see also Research UK:

We have moved the first BoE hike to November 2015, 15 April 2015.

Retail sales in March are also likely to attract attention as the figures will give us

more information about how private consumption has performed in Q1. Production

and construction figures have been weak suggesting that Q1 growth has slowed. By

how much depends to a large extent on the development in private consumption. We

expect retail sales excluding fuels increased 1.3% m/m in March, implying a quarterly

growth in retail sales of 1.0% q/q in Q1. Private consumption is supported by the very

high consumer confidence (currently at the highest level post-crisis), positive real

wage growth for the first time since 2009 and increasing employment.

The election campaign is in full swing and will remain in focus until the election day

on 7 May. Currently, the opinion polls indicate another hung parliament. A Labour-

led government supported by the Scottish National Party (SNP) and others seems

most likely at the moment.

In China the most important event next week is the flash estimate for HSBC/Markit

manufacturing PMI for April. The industrial production data has so far been weak in

2015 and at the moment there is a substantial gap between the manufacturing PMIs

and the hard industrial production data - with the manufacturing PMIs not indicating

as severe a weakness as the industrial production data (see chart). This suggests there

is still downward pressure on the manufacturing PMIs and it is still too early to call

the bottom for China’s manufacturing PMIs despite the recent easing measures.

Hence, we expect the flash estimate for the HSBC/Markit manufacturing PMI to have

declined further to 49.2 in April from a final reading of 49.6 in March. The official

house prices for March will be released on Saturday. Private surveys suggest that

house prices declined slightly month-on-month suggesting our that house prices

(based on prices in the 35 largest cities) in March declined 5.5% y/y after declining

5.3% y/y in. The overall picture is that the decline in house prices has started to slow.

In Japan the flash estimate for JMMA/Markit manufacturing PMI for April should be

the most interesting release next week. Our models for Japan’s manufacturing PMI

gives mixed signals at the moment. The short term model based on production plans

for March and April suggest that the manufacturing PMI continued to move lower in

April. However, the model based on the Economic Watchers survey has for some

time (wrongly) been suggesting that manufacturing PMI should move higher. Hence,

we stick to the signal from the weak production plans and expect the JMMA/Markit

manufacturing PMI to have dropped below 50 in April. Foreign trade data for March

will also be released next week. Preliminary foreign trade data suggest that imports

were weak with import growth slowing further to 12.5% y/y in March after declining

3.6% y/y in the previous month. Lower commodity prices are part of the explanation

for the weak import growth. Export growth on the other hand is expected by us to

have rebounded to 7.7% y/y in March from 2.5% y/y in the previous in the previous

month. The overall picture is that Japan trade balance could soon be back in surplus.

Retail sales indicate higher growth in

private consumption

Source: ONS

In China weak IP suggest downward

pressure on manufacturing PMIs

Source: Macrobond Financial and Danske Bank

Markets

In Japan production plans suggest

lower manufacturing PMI in April

Source: Macrobond Financial and Danske Bank

Markets

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Scandi

In Denmark the coming week brings consumer confidence data for April. After the

surprise increase in March to 13.9, the second-highest score since the statistics began

back in 1974, we expect the indicator to fall slightly to 12. This can be seen partly as a

normalisation and partly as a result of higher petrol prices, with greater optimism on

the European economy and the domestic housing market pulling in the other

direction. Even with this small decrease, consumer confidence will still be very high.

In Sweden, the week ahead contains only the labour force survey where we expect

another lacklustre outcome demonstrating still high unemployment rates and softer

employment growth. Given new mortgage regulations and reintroduced labour market

regulations and an overall low income growth, we expect the labour market

improvement to continue, but at an agonizingly slow pace.

We see no market movers in Norway in the coming week.

Market movers ahead

Source: Bloomberg, Danske Bank Markets

Global movers Event Period Danske Consensus Previous

During the week Sun 19 EUR Finland Holds Parliamentary Elections

Tue 21-Apr 11:00 DEM ZEW exspectations Index Apr 54.0 55.0 54.8

Wed 22-Apr 10:30 GBP Minutes from MPC meeting

16:00 USD Existing home sales m (m/m) Mar 5.05M(3.4%) 5.04M(3.3%) 4.88M(1.2%)

Thurs 23-Apr 3:45 CNY HSBC manf. PMI, preliminary Index Apr 49.2 49.4 49.6

10:00 EUR PMI manufacturing, preliminary Index Apr 53.0 52.5 52.2

10:00 EUR PMI services, preliminary Index Apr 54.7 54.5 54.2

10:30 GBP Retail Sales m/m|y/y Mar 1.3%|6.3% 0.6%|5.6% 0.7%|5.7%

15:45 USD Markit manufacturing PMI, preliminary Index Apr 56.0 55.7

16:00 USD New Home Sales 1000 (m/m) Mar 522K(-3%) 510K(-5.4%) 539K (7.8%)

Fri 24-Apr - EUR Eurogroup meeting in Riga

10:00 DEM IFO - business climate Index Apr 108.2 108.3 107.9

14:30 USD Durable Goods Orders m/m Mar 0.6% -1.4%

Scandi movers

Tue 21-Apr 9:30 SEK Unemployment s.a. % Mar 7.9%

Very high consumer confidence

Source: Statistics Denmark

Labour market losing momentum

Source: Statistics Sweden, Macrobond Financial

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Global Macro and Market Themes

Tentative signs of bottom in global growth

US data weakness has attracted a lot of attention of late. March failed to deliver a strong

rebound, which has led the market to postpone expectations of the first Fed hike to

December or early 2016. However, we continue to look for a recovery of US growth in

coming quarters and we believe that this, in combination with a tighter labour

market, will lead to a first hike in September. This is also still signalled by Fed

comments (see below).

Although the rebound in US retail sales in March was weaker than expected, it did point

to a bottom in the recent down cycle. Weekly retail sales have picked up lately,

suggesting that the improvement will continue in April. Similarly, manufacturing

production shows signs of turning after the steady decline since Q3 last year. One should

bear in mind that growth in Q2 and Q3 last year was extraordinarily strong, averaging

4.8%. This was probably ‘too’ strong and part of the current weakness can be viewed as

payback from this. It is very similar to last year’s pattern when Q1 was also weak

following a couple of very strong quarters. Markit PMI captured the downturn in growth

but has turned around lately, underpinning our expectation that growth is bound to

recover. Other business surveys have been softer and our ISM model still shows

downside in the very short term. However, as we move through the next three to six

months we expect to see improvement in US data driven by very strong consumer

fundamentals from a robust labour market, low gasoline prices and healthy wealth gains.

A sharp decline in the Credit Managers Index (CMI) has gotten some attention

lately, see CMI report. The index is a credit version of PMI in which businesses are asked

about the availability of credit. Some have used the decline in the CMI to argue that the

weakness in consumption is due to credit tightening. However, firstly, the index only asks

businesses and not consumers and, secondly, that it hits consumers as well does not fit

with the fact that consumer credit is rising and that home sales, which depend a lot on

credit availability, have picked up recently. One likely reason for the decline in the CMI

is that businesses with exposure to the energy sector face a sharp contraction in credit

conditions, which is pulling the index down. That said, it should be watched. The USD

appreciation may also affect credit availability. The Fed’s Senior Loan Officer Survey on

4 May will show whether we are seeing a very broad based credit tightening or one that is

concentrated in selected sectors.

Stock market playing the recovery

With very tentative signs of bottoming in the US and continued strong euro-area

data we believe we are close to a turning point for global growth. We expect this to

include China, as we anticipate that stimulus will drive a gradual recovery in coming

quarters.

Key points

We believe we are at a low point in

the global business cycle.

US growth to recover from here.

Stock markets playing recovery.

Fed members still signal hike in

June-September window.

German yields to go lower still as

more maturities go below -0.2%.

EUR/USD to decline on better US

data.

Tentative signs of improvement

Source: Macrobond Financial

US Markit PMI continues to point to

rebound in growth

Source: Macrobond Financial

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The ECB bank lending survey continued to support the case for improving credit

growth in the euro area. Lending standards were eased again in Q1 and demand for

credit is also at robust levels, as was the case in Q4. Euro-area car sales got a bit of

attention too this week, rising strongly by close to 12% y/y. While we share the optimism

on the euro area, the strength in the annual rate is actually more due to base effects. When

looking at seasonally adjusted data the big increase in car sales took place in H2 last year

and has moved broadly sideways since.

The stock market is increasingly trading on the expectation of higher global growth

in coming quarters. EM stocks have seen a significant rally driven by especially Chinese

equities. Such a rally often takes place at the low point for Chinese PMI and when

Chinese stimulus is announced. Markets are also anticipating the US recovery but as we

have argued, stronger growth has become more of a double-edged sword for the US stock

market as it also implies that a Fed hike is to be expected. Europe has been ahead in the

latest cycle as data have been very robust, see Business Cycle Monitor: Europe the only

pillar of strength currently, 15 April 2015. We continue to look for robust growth in

the euro area and given the very accommodative stance of monetary policy here, we

expect euro-area stocks to continue their outperformance in the medium to long

term. The tensions between Greece and the EU could be a trigger for correction in the

euro area from technically stretched levels but in the medium term we still see upside for

euro stocks.

Fed comments show June-September lift-off still on table

Fed speakers this week broadly signalled that the June-September window for lift-

off is still relevant. Vice-chairman Stanley Fischer was maybe the most hawkish saying

that ‘there’s one weak employment report and five or six spectacular ones before it’. He

also repeated that he expects growth to pick up after Q1 and importantly, that he sees

‘signs of wages beginning to rise in a variety of places’. The latter is noteworthy as this is

exactly what the Fed is looking for to become more confident that inflation will move

towards its 2% target in the medium term, which is a prerequisite for lift-off.

Lockhart, who is in the dovish to neutral camp, said that he would prefer to hike later,

referring to September rather than June. This is important because the markets are

increasingly looking for a later date, now pricing it in December.

As the US surprise index is expected to rise over the coming months from the very

low point currently, we expect US bond yields to move slightly higher going into the

summer. Normally yields move considerably higher in the three-month window ahead of

the first Fed hike. However, the relentless decline in German yields is having a spill-over

effect on demand for US bonds as investors look for alternatives to German bonds. This is

going to dampen the rise in US yields.

While EUR/USD has moved a bit higher over the past week, we believe that the next leg

down will come soon as the US surprise index turns higher and it becomes clearer that a

Fed hike is not very far away. We still look for EUR/USD to go below parity on a six-

month horizon, see also FX Forecast Update: Keep calm and carry on, 16 April 2015.

German yields to continue lower – periphery under pressure

The theme in the German bond market is one of bond scarcity. Even though ECB

president Mario Draghi made it clear that he thought it was premature to have a

discussion of scarcity, ECB’s Hansson said in a comment on Thursday that the ECB

could move to corporate bonds if needed. This suggests that the ECB is considering what

Euro banks continue to ease lending

standards

Source: Macrobond Financial

Global stocks climb on recovery

expectations and easy money

Source: Macrobond Financial

Emerging Markets anticipate bottom

in Chinese economy

Source: Macrobond Financial

Long yields keep declining as more

maturities go below ECB’s -0.2% limit

Source: Macrobond Financial

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to do as the bond programme progresses and more of the yield curve moves below -20bp

deposit rate under which the ECB has stated it will not buy bonds. The lower bond yields

fall, the more maturities of the German yield curve move below -20bp, which forces the

ECB further out on the yield curve. Bonds with maturities out to four years are now

below the -20bp threshold and as yields continue lower, this will push ECB buying

further out. With the market knowing this, investor demand keeps being pushed out

and hence long bond yields go lower and lower – and we expect this trend to

continue. This week we saw another low in German bond yields with the 10-year yield

going below 10bp and 30-year bond yield below 50bp.

In the periphery and credit space the tensions in Greece have, however, led to falling

demand. The chicken game between Germany and Greece has intensified and market

fears of a Greek exit have moved up. First hurdle for Greece is an IMF payment on 12

May that it needs to find money for. Given the recent quite harsh comments from German

finance minister Schäuble it seems likely that a solution will not be found until the last

minute. However, after that another and bigger hurdle comes in July when Greece needs

to repay EUR3.5bn to the ECB as bonds from the SMP programme expire. We still

expect Greece to stay in the euro and that it will do what is necessary. Hence we continue

to look for a continued trend of gradual tightening of periphery spreads supported

by ECB buying and improving fundamentals. In the short term, though, expect more

volatility on the back of continued tension about the Greek situation.

Global market views

Source: Danske Bank Markets

Asset class Main factors

Equities

M oderately positive on 3m horizon, positive on 12m horizon M oderate growth outlook in US and Japan, a strong recovery in the Euro Area and soft China. A still low

oil price and monetary easing from ECB, BoJ and PBoC supports equities. Equities are still attractive vs. bonds

Bond market

Core yields: Bund yields lower, US yield moderately higher ECB QE drive lower bund yields. Fed hikes, recovery and higher inflation driver higher US yields

US-Euro spread: Wider Policy divergence drives spreads wider

Peripheral spreads to tighten gradually from here QE continue to support the periphery - the largest move is behind us

Credit spread to remain stable, but with bouts of vo latility Added liquidity from ECB, stable fundamentals and search for yield

FX

EUR/USD - Lower short- and medium-term Lower on 0-6 months on diverging growth and monetary policy

USD/JPY - Higher Relative monetary policy, Fed hikes and outflows will remain supported by pension reform

EUR/SEK - Stuck between 9.10-9.45 near-term, lower medium-term Battle between Riksbank and ECB for now, further out EUR/SEK to fall on Swedish growth outperformance

EUR/NOK - Higher in coming month, then lower Oil prices and Norges Bank's rates decisions to drive NOK in coming months

Commodities

Oil prices - starting to recover Higher global growth, supply consolidation to support recovery this year. Limited risk of supply disruptions

M etal prices sideways before trending up during the year Chinese growth concerns a near-term negative factor, supply side risks.

Gold prices to correct lower still Trending down as first Fed hike draws closer. Geopolitical concerns a supportive factor.

Agricultural risks remain on the upside Trending up again, extreme weather is key upside risk.

Periphery under pressure recently –

but we still look for declining trend

Source: Macrobond Financial

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Scandi Update

Denmark – rise in apartment prices due mainly to newbuilds

There were few significant releases in Denmark during the week, but estate agent chain

home published some interesting figures for the Danish housing market in Q1. These

show that the housing market made a good start to 2015, with increases in both prices and

turnover (even when seasonally adjusted). Most interesting were the apartment price data

for Copenhagen, given that the debate about a potential housing bubble in Copenhagen

has gained traction in recent months as interest rates have dropped even lower. The data

show an increase of 8.2% from Q4 14 to Q1 15, which is an enormous jump from one

quarter to another. This should, however, be seen in the light of higher sales of new

apartment projects, which rose sharply in price. Although the price of existing apartments

also increased, the rise was more moderate than for new developments.

Sweden – lowering the odds

The latest inflation outcome and inflation expectations survey (money market players) did

nothing to alleviate the pressures on the Riksbank to act again. Inflation came in a notch

below even our own below-consensus forecast, albeit mainly due to a much larger

seasonal book-sale than usual (something that should reverse in April). Alas, from a

Riksbank perspective, the Prospera survey of money market players longer term inflation

expectations (2-5 yrs) remained unaffected by previously higher inflation outcomes

(survey conducted before March inflation was published) and additional Riksbank

stimuli. Indeed, on some accounts, inflation expectations declined even further.

Hence, the past week’s data did nothing to help the Riksbank in its quest for higher

inflation and inflation expectations, leaving the Riksbank again under pressure to do

more. We continue to expect further Riksbank measures.

Norway – higher oil prices

Oil prices have risen in the past week, and the NOK has followed suit. The reason being

that higher oil prices lessen the downside risk to the Norwegian economy presented by

lower oil prices and reduced activity in oil-related industries. The import-weighted NOK

exchange rate is now marginally stronger than Norges Bank had assumed in the March

monetary policy report, which could, in principle, spell a greater chance of a rate cut in

May. On the other hand, oil prices are somewhat higher than the central bank expected.

We assume that for as long as the NOK’s appreciation is due to higher oil prices reducing

the downside risk to the Norwegian economy, there will be little reason for Norges Bank

to bring forward its rate cut. Short-term interest rates should therefore rise, rather than

fall, on this news. We still expect Norges Bank to lower its policy rate in June, based on

activity in oil-related industries dropping back significantly over the next couple of

months. As higher oil prices will gradually cushion this decline in activity, we reckon the

likely June rate cut will be the last in the current phase.

Higher sales of new apartment

projects

Note: Data not adjusted for seasonal variations or

apartment size.

Source: home, Danske Bank.

Inflation expectations still low from a

historical perspective

Source: Prospera, Macrobond Financial.

NOK strengthens on higher oil prices

Source: Norges Bank

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Latest research from Danske Bank Markets

17/4 Flash Comment UK: Strong labour market report supports our call for a BoE hike

in November 2015

The UK labour market statistics released today show that the labour market continued to

improve. The unemployment rate (3M) declined from 5.7% in January to 5.6% in

February (Danske Bank: 5.7%, consensus: 5.6%).

16/4 Research: Finnish parliamentary polls point to a new government

Finland holds parliamentary elections on 19th April 2015.

15/ 4 Flash Comment - China: GDP growth eases further, poised to drop below 7%

Data released in China overnight were weaker than expected. While GDP growth avoided

slipping below the government’s 7% target in Q1 15, the weak data released for March

suggest that GDP growth will drop below 7% y/y in Q2 15.

15/ 4 Global Business Cycle Monitor: Europe the only pillar of strength currently

Global indicators have disappointed with Europe being the only pillar of strength. We see

more downside risk in US ISM in the short term followed by recovery over the summer.

15/ 4 Research UK: We have moved the first BoE hike to November 2015

We have moved the first Bank Rate hike three months forward from August 2015 to

November 2015.

15/ 4 Flash Comment - ECB's Draghi: Full QE implementation and no deposit rate cut

ECB president Draghi had a slightly dovish stance at today’s ECB meeting where the

most important message was ‘the QE programme must be fully implemented to work’.

14/ 4 Flash Comment UK: Still neither inflation nor deflation

UK CPI inflation was unchanged at 0.0% y/y in March (Danske Bank: 0.0% y/y,

consensus: 0.0% y/y).

14/ 4 Flash Comment US: Rebound in retail sales not as strong as expected

Consumers continue to save rather than spend and we lower our Q1 and Q2 GDP

forecasts

13/ 4 Flash Comment - China: plunge in exports in March mainly due to Chinese New

Year

The foreign trade data for March were weaker than expected. Exports (in USD) in March

contracted 15.0% y/y after surging 48.3% y/y in February, while imports contracted

12.7% y/y after contracting 20.5% y/y in February.

10 | 17 April 2015 www.danskeresearch.com

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Macroeconomic forecast

Source: OECD and Danske Bank. 1) % y/y. 2) % contribution to GDP growth. 3) % of labour force. 4) % of GDP.

Macro forecast, Scandinavia

Denmark 2014 1.1 0.6 1.4 3.7 0.3 2.6 3.8 0.6 5.1 1.6 45.1 6.22015 1.7 1.6 0.7 2.5 0.0 3.3 2.8 0.7 4.8 -2.4 38.9 5.92016 2.1 2.0 0.2 3.9 0.0 4.9 4.6 1.7 4.6 -2.5 39.4 5.4

Sweden 2014 2.1 2.4 1.9 6.5 0.2 3.3 6.5 -0.2 7.9 -2.1 41.2 5.82015 2.4 2.0 1.2 6.0 0.0 5.5 6.6 0.3 7.7 -2.0 41.8 5.62016 2.3 1.8 1.5 3.8 0.1 4.9 5.1 1.2 7.5 -1.0 42.3 5.7

Norway 2014 2.3 2.1 2.5 1.2 0.4 1.7 1.6 2.1 3.5 - - -2015 1.7 1.8 2.4 -6.5 -0.1 2.5 1.0 2.8 3.7 - - -2016 2.2 2.0 2.2 1.0 0.0 1.0 3.0 2.0 3.7 - - -

Macro forecast, Euroland

Euroland 2014 0.9 1.0 0.7 1.0 -0.1 3.7 3.8 0.4 11.6 -2.6 94.3 2.52015 1.6 1.8 0.8 2.0 0.0 4.5 4.1 0.2 11.1 -2.1 94.1 2.62016 2.1 1.1 0.7 5.4 0.0 4.2 4.1 1.4 10.5 -1.7 92.8 2.5

Germany 2014 1.6 1.2 1.1 3.4 -0.1 3.8 3.3 0.8 5.0 0.2 74.5 7.12015 2.3 2.4 1.1 3.0 0.0 5.7 5.3 0.2 5.0 0.0 72.4 7.12016 2.6 1.6 0.8 6.8 0.0 4.9 5.3 2.0 4.7 0.2 69.6 6.7

France 2014 0.4 0.6 1.9 -1.6 -0.1 2.7 3.8 0.6 10.2 -4.4 95.5 -1.92015 0.7 1.1 1.0 -0.7 0.0 4.6 4.2 0.0 10.4 -4.5 98.1 -1.92016 1.0 0.8 0.4 3.1 0.0 3.4 4.0 1.3 10.2 -4.7 99.8 -2.2

Italy 2014 -0.4 0.3 -0.9 -3.2 0.3 2.4 1.6 0.2 12.7 -3.0 132.2 1.52015 0.5 0.8 0.5 -0.7 0.0 4.3 2.6 0.0 12.6 -2.7 133.8 1.52016 1.4 0.7 0.4 3.4 0.0 4.3 3.8 1.4 12.4 -2.2 132.7 1.8

Spain 2014 1.4 2.4 0.1 3.4 -0.1 4.2 7.6 -0.2 24.5 -5.6 98.1 0.52015 2.4 2.7 -0.7 5.3 0.0 5.1 5.8 -0.7 23.2 -4.5 101.2 0.72016 2.6 1.9 0.4 6.8 0.0 4.5 4.9 1.3 21.7 -3.7 100.6 0.9

Finland 2014 -0.1 -0.2 0.2 -5.1 - -0.4 -1.4 1.0 8.7 -3.4 59.5 -1.92015 0.5 0.0 0.0 -1.5 - 3.0 1.5 0.3 9.0 -2.7 61.5 -1.22016 1.5 0.5 0.0 3.0 - 4.0 2.5 1.0 8.8 -1.5 62.5 -0.7

Macro forecast, Global

USA 2014 2.4 2.5 -0.2 5.3 0.0 3.2 4.0 1.6 6.2 -4.1 101.0 -2.32015 2.5 3.1 0.9 3.8 0.0 1.3 3.6 0.5 5.2 -2.9 104.0 -2.52016 2.5 2.7 0.9 5.2 0.0 3.7 4.9 2.3 4.6 -2.6 103.0 -2.6

Japan 2014 -0.1 -1.3 0.3 2.6 0.2 8.2 7.2 2.4 3.6 -8.1 245.0 0.32015 1.1 0.1 1.2 0.0 0.0 7.6 3.8 1.1 3.5 -6.7 245.0 1.02016 1.4 1.4 1.2 0.9 0.2 6.3 6.2 1.6 3.3 -6.3 246.0 1.1

China 2014 7.4 - - - - - - 2.0 4.3 -1.1 40.7 1.82015 6.8 - - - - - - 1.7 4.2 -0.8 41.8 2.42016 6.7 - - - - - - 2.3 4.2 -0.8 42.8 2.3

UK 2014 2.8 2.5 2.1 7.8 -0.2 0.6 2.2 1.5 6.2 -5.4 88.7 -4.82015 2.8 2.5 0.7 6.1 0.0 2.4 3.9 0.3 5.5 -4.6 90.1 -4.32016 2.8 2.3 -1.0 7.5 0.0 4.7 4.7 1.6 5.3 -3.6 91.0 -3.6

Current

acc.4

GDP 1

Private

cons.1

Public

cons.1

Fixed

inv.1

Stock

build.2

Ex-

ports1

Im-

ports1

Infla-

tion1

Unem-

ploym.3

Public

budget4

Public

debt4

Year

Year GDP 1

Private

cons.1

Public

cons.1

Fixed

inv.1

Stock

build.2

Ex-

ports1

Im-

ports1

Infla-

tion1

Unem-

ploym.3

Public

budget4

Current

acc.4

Public

debt4

Current

acc.4

Im-

ports1

Public

debt4

Public

budget4

Ex-

ports1

Infla-

tion1

Unem-

ploym.3

Year GDP 1

Private

cons.1

Public

cons.1

Fixed

inv.1

Stock

build.2

11 | 17 April 2015 www.danskeresearch.com

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Financial forecast

Source: Danske Bank Markets

Bond and money markets

Currencyvs USD

Currencyvs DKK

USD 17-Apr - 690.5

+3m - 737.5

+6m - 752.4+12m - 689.7

EUR 17-Apr 108.0 746.0

+3m 101.0 744.9

+6m 99.0 744.9+12m 108.0 744.9

JPY 17-Apr 118.7 5.82

+3m 125.0 5.90

+6m 126.0 5.97+12m 127.0 5.43

GBP 17-Apr 150.1 1036.7

+3m 144.0 1064.1

+6m 143.0 1079.6+12m 152.0 1049.2

CHF 17-Apr 95.2 725.6

+3m 103.0 716.3

+6m 106.1 709.4+12m 101.9 677.2

DKK 17-Apr 690.5 -

+3m 737.5 -

+6m 752.4 -+12m 689.7 -

SEK 17-Apr 859.5 80.3

+3m 930.7 79.2

+6m 929.3 81.0+12m 833.3 82.8

NOK 17-Apr 777.3 88.8

+3m 841.6 87.6

+6m 833.3 90.3+12m 754.6 91.4

Equity Markets

Regional

Price trend12 mth.

Regional recommen-dations

USA (USD) Strong earnings growth, expensive valuation 5-8% Underweight

Emerging markets (local curr) Commodity-related equities are pressured 0-5% Underweight

Japan Reflation, earnings growth, fair valuation 5-10% Overweight

Europe (ex. Nordics) Reflation, multiple expansion, attractive valuation 10-15% OverweightNordics Earnings growth, fair valuation 5-10% Overweight

Commodities

Average

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2015 2016

NYMEX WTI 49 57 65 71 72 72 73 73 61 73

ICE Brent 54 62 70 76 77 77 78 78 66 78

Copper 5,750 5,750 6,000 6,250 6,400 6,550 6,700 6,850 5,938 6,625

Zinc 2,100 2,100 2,150 2,200 2,225 2,250 2,275 2,300 2,138 2,263

Nickel 14,500 14,500 15,500 16,500 17,000 17,500 18,000 18,500 15,250 17,750

Aluminium 1,800 1,800 1,875 1,950 2,000 2,050 2,100 2,150 1,856 2,075

Gold 1,215 1,205 1,195 1,185 1,175 1,175 1,175 1,175 1,200 1,175

Matif Mill Wheat (€/t) 190 195 199 201 202 204 206 208 196 205

Rapeseed (€/t) 365 375 382 386 389 393 396 400 377 395

CBOT Wheat (USd/bushel) 545 555 560 565 570 575 580 585 556 578

CBOT Corn (USd/bushel) 395 405 410 415 420 425 430 435 406 428CBOT Soybeans (USd/bushel) 1,050 1,070 1,080 1,090 1,100 1,110 1,120 1,130 1,073 1,115

Medium

Medium

Medium 0-8%

Medium 0-5%

0-5%

0-5%Medium 0-5%

965

495

0.44

0.700.75

1.81

1.75

1.75

2.202.30

0.02

-

--

1.85

0.600.60

0.60

0.78

0.70

0.69

0.45

0.450.45

-

--

1.66

2.00

0.51

375

17-Apr

56

12,845

6,060

2,229

1,204

183

64

1,820

20162015

Currencyvs EUR

2-yr swap yield

Risk profile3 mth.

Price trend3 mth.

2.45

1.94

2.70

0.73

0.06

0.15

0.90

-0.75

0.13

0.03

0.030.03

1.35

72.0

2.85

69.071.0

104.0

105.0110.0

101.0

99.0108.0

126.3

124.7137.2

108.0

-

-

--

128.3

744.9

744.9744.9

928.6

839.8

815.0

940.0

825.0

920.0900.0

850.0

102.8

746.0

70.0

1.35

-0.05

1.161.51

1.25

-0.20

1.652.25

1.15

1.401.75

-

-

1.25

-0.10

-0.20

1.15

0.08

0.080.08

-

--

-0.15

-0.10

-0.20

10-yr swap yield

-0.14

0.05

0.050.05

3m interest rate

1.25

0.05

0.10

0.50

-0.75

0.05

0.00

0.55

0.771.11

1.00

1.00

1.25

-0.85-0.85

-0.25

0.10

-0.19

Key int.rate

0.25

0.25

0.501.00

1.00

-0.85

0.05

0.05

0.100.10

0.50

1.25

-0.30

1.00

-0.30-0.30

0.05

0.50

0.27

0.00

0.09

0.57

371

-0.15

-0.81

-

--

-0.25

-0.25

-0.25

0.45

0.711.28

-0.01

0.00

0.20

0.15

12 | 17 April 2015 www.danskeresearch.com

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Calendar

Calendar

Source: Danske Bank Markets

Continued

Source: Danske Bank Markets

Calendar

Source: Danske Bank Markets

Continued

Source: Danske Bank Markets

Source: Danske Bank Markets

Key Data and Events in Week 17

During the week Period Danske Bank Consensus Previous

Fri 17 - 19 GLO IMF and World Bank Spring meeting

Sat 18 CNY Property prices y/y

Sat 18 EUR ECB's Draghi holds press conference (IMF)

Sat 18 EUR ECB's Weidmann & German Schäuble in DC

Sun 19 EUR Finland Holds Parliamentary Elections

Fri 24 - 30 JPY Small business confidence m/m|y/y Apr 49.8

Monday, April 20, 2015 Period Danske Bank Consensus Previous

0:45 NZD CPI q/q|y/y 1st quarter -0.2%|0.2% -0.2%|0.8%

1:01 GBP Rightmove House Prices m/m|y/y Apr 1.0%|5.4%

1:50 JPY Tertiary industry index m/m Feb -0.7% 1.4%

9:00 CHF SNB Sight Deposits

15:00 EUR ECB's Constancio speaks in Brussels

Tuesday, April 21, 2015 Period Danske Bank Consensus Previous

7:00 JPY Leading economic index Index Feb 105.3

9:30 SEK Unemployment % Mar 8.4%

9:30 SEK Unemployment s.a. % Mar 7.9%

11:00 DEM ZEW current situation Index Apr 55.3 55.0 55.1

11:00 DEM ZEW exspectations Index Apr 54.0 55.0 54.8

Wednesday, April 22, 2015 Period Danske Bank Consensus Previous

1:50 JPY Export y/y (%) Mar 7.7 8.5 2.5

1:50 JPY Import y/y (%) Mar -12.5 -12.6 -3.6

1:50 JPY Trade balance, s.a. JPY bn Mar -200.0 -409.3 -638.8

3:30 AUD CPI q/q|y/y 1st quarter 0.1%|1.3% 0.2%|1.7%

9:00 DKK Consumer confidence Net. bal. Apr 12.0 13.9

9:00 DKK Retail Sales m/m|y/y Mar -0.2%|0.8%

10:30 GBP Minutes from MPC meeting

13:00 USD MBA Mortgage Applications %

16:00 EUR Consumer confidence Net bal. Apr -2.5 -2.5 -3.7

16:00 USD Existing home sales m (m/m) Mar 5.05M(3.4%) 5.04M(3.3%) 4.88M(1.2%)

13 | 17 April 2015 www.danskeresearch.com

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Continued

Source: Danske Bank Markets

Thursday, April 23, 2015 Period Danske Bank Consensus Previous

3:30 AUD NAB Business Confidence Index 1st quarter 2.0

3:35 JPY Markit/JMMA manufacturing PMI, preliminary Index Apr 49.8 50.7 50.3

3:45 CNY HSBC manf. PMI, preliminary Index Apr 49.2 49.4 49.6

8:00 CHF Trade balance CHF bn Mar 2.47

8:45 FRF Business confidence Index Apr 96.0

9:00 FRF PMI manufacturing, preliminary Index Apr 50.0 48.8

9:00 FRF PMI Services, preliminary Index Apr 52.2 52.4

9:00 ESP Unemployment rate % 1st quarter 23.7%

9:30 DEM PMI manufacturing, preliminary Index Apr 53.0 53.0 52.8

9:30 DEM PMI service, preliminary Index Apr 55.6 55.5 55.4

9:45 EUR ECB's Praet speaks in Berlin

10:00 EUR PMI composite, preliminary Index Apr 54.5 54.3 54.0

10:00 EUR PMI manufacturing, preliminary Index Apr 53.0 52.5 52.2

10:00 EUR PMI services, preliminary Index Apr 54.7 54.5 54.2

10:30 GBP Retail Sales m/m|y/y Mar 1.3%|6.3% 0.6%|5.6% 0.7%|5.7%

10:30 GBP Retail sales excl. auto m/m|y/y Mar 1.3%|6.4% 0.7%|5.1%

14:30 USD Initial jobless claims 1000 294K

15:45 USD Markit manufacturing PMI, preliminary Index Apr 56.0 55.7

16:00 USD New Home Sales 1000 (m/m) Mar 522K(-3%) 510K(-5.4%) 539K (7.8%)

Friday, April 24, 2015 Period Danske Bank Consensus Previous

- EUR Eurogroup meeting in Riga

- EUR Fitch may publish Spain's debt rating

- EUR Fitch may publish Cyprus's debt rating

6:30 JPY All industry activity index m/m Feb -1.0% 1.9%

10:00 DEM IFO - business climate Index Apr 108.2 108.3 107.9

10:00 DEM IFO - current assessment Index Apr 112.3 112.3 112.0

10:00 DEM IFO - expectations Index Apr 104.2 104.5 103.9

10:00 CHF SNB's Jordan speaks in Bern

14:30 USD Durable Goods Orders m/m Mar 0.6% -1.4%

The editors do not guarantee the accurateness of figures, hours or dates stated above

For furher information, call (+45 ) 45 12 85 22.

14 | 17 April 2015 www.danskeresearch.com

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Disclosure This research report has been prepared by Danske Bank Markets, a division of Danske Bank A/S (‘Danske

Bank’). The authors of the research report are Allan von Mehren, Chief Analyst and Steen Bocian, Chief

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