http://www.fxstreet.com/fundamental/analysis-reports/flash-comment/http://www.fxstreet.com/fundamental/http://mediaserver.fxstreet.com/images/fxstreet-provider-logo1-en.gif7http://www.fxstreet.com/fundamental/analysis-reports/flash-comment/2012-02-10.v03.htmlEuro area finance ministers set three conditions At the Eurogroup meeting last night the euro area finance ministers set three conditions that need to be fulfilled before the ministers will approve the second rescue package to Greece: 1) Parliament approval of policy package (vote set for Sunday) 2) Additional EUR325m in structural reduction of deficit to be detailed before next Wednesday 3) That the political leaders of the coalition parties sign up to the implementation of the programme. TheFri, 10 Feb 2012 09:24:08 GMThttp://www.fxstreet.com/fundamental/analysis-reports/danskeresearch@danskebank.com (Danske Bank A/S)http://www.fxstreet.com/fundamental/analysis-reports/flash-comment/2012-02-10.v03.htmlhttp://www.fxstreet.com/fundamental/analysis-reports/flash-comment/2012-02-10.v02.htmlChina’s export and import growth slowed markedly in January largely reflecting the seasonal distortions from an early Chinese New Year Holiday this year. While we should be careful to draw conclusions on the back of the January numbers, China’s export growth appears to be improving, while there are signs of weakness in imports. In our view we are poised to see a temporary weakness in China’s imports in the coming months driven mainly by weaker import of commodities. China’s import ofFri, 10 Feb 2012 08:59:28 GMThttp://www.fxstreet.com/fundamental/analysis-reports/danskeresearch@danskebank.com (Danske Bank A/S)http://www.fxstreet.com/fundamental/analysis-reports/flash-comment/2012-02-10.v02.htmlhttp://www.fxstreet.com/fundamental/analysis-reports/flash-comment/2012-02-10.htmlThe ECB kept the leading interest rate unchanged at 1% as expected. We continue to expect the ECB to leave the refinancing rate unchanged until 2014. The chance of more rate cuts has diminished further. Mario Draghi expressed concern about the signs of a credit tightening. In the case of a broad-based credit contraction in the euro area, we expect policy reaction from the ECB, EBA and/or governments. Draghi declined to comment on how the ECB’s holding of Greek sovereign bonds would be treatedFri, 10 Feb 2012 05:48:49 GMThttp://www.fxstreet.com/fundamental/analysis-reports/danskeresearch@danskebank.com (Danske Bank A/S)http://www.fxstreet.com/fundamental/analysis-reports/flash-comment/2012-02-10.htmlhttp://www.fxstreet.com/fundamental/analysis-reports/flash-comment/2012-02-09.v03.htmlNew QE buying strategy causes yield curve to steepen The Bank of England announced earlier today that it will continue with its quantitative easing programme. Specifically, the Bank of England will purchase £50bn Gilts over the next three months, i.e. monthly buying will decrease slightly from £18.7bn to £16.7bn. As the bond supply in H1 is slightly higher than in Q4, there will be a modest reduction in the net impact of QE. QE will still outpace supply though and today’s decision should,Thu, 09 Feb 2012 15:15:20 GMThttp://www.fxstreet.com/fundamental/analysis-reports/danskeresearch@danskebank.com (Danske Bank A/S)http://www.fxstreet.com/fundamental/analysis-reports/flash-comment/2012-02-09.v03.htmlhttp://www.fxstreet.com/fundamental/analysis-reports/flash-comment/2012-02-09.v02.htmlEUR300m away from a deal Although negotiating through the night, Greek politicians did not reach an agreement on the required austerity measures. As they have now failed to meet about five deadlines, the Greeks will have to adhere to a very tight schedule if Greece is to avert a sovereign default on 20 March, when about EUR14.4bn worth of debt matures. However, Greek politicians are very close to the goal. The stumbling block was pension cuts worth EUR300m out of a total austerity packageThu, 09 Feb 2012 13:23:05 GMThttp://www.fxstreet.com/fundamental/analysis-reports/danskeresearch@danskebank.com (Danske Bank A/S)http://www.fxstreet.com/fundamental/analysis-reports/flash-comment/2012-02-09.v02.htmlhttp://www.fxstreet.com/fundamental/analysis-reports/flash-comment/2012-02-09.htmlInflation in January accelerated markedly from 4.1% y/y to 4.5% y/y, but this appears to be solely due to seasonal distortions from the Chinese New Year holiday.  A continued decline in producer price inflation and subdued core inflation suggest that the downward trend in inflation remains intact. Hence, the acceleration in inflation should prove temporary and we still expect inflation to drop below 3.5% y/y by mid-2012.  Nevertheless, the unexpected large increase in inflation inThu, 09 Feb 2012 10:23:15 GMThttp://www.fxstreet.com/fundamental/analysis-reports/danskeresearch@danskebank.com (Danske Bank A/S)http://www.fxstreet.com/fundamental/analysis-reports/flash-comment/2012-02-09.htmlhttp://www.fxstreet.com/fundamental/analysis-reports/flash-comment/2012-02-08.htmlThe market has scaled back expectations of rate cuts of late, both for the February meeting, where currently 16bp is priced in, and for the year, some 60bp compared with about 85bp at the peak few weeks ago. Today’s report underlines that demand - especially in manufacturing - declined late last year and that it is expected to deteriorate further over the next six months. Construction - normally a cyclically late sector - expects a decline in housing production going forward, while retailersWed, 08 Feb 2012 11:27:58 GMThttp://www.fxstreet.com/fundamental/analysis-reports/danskeresearch@danskebank.com (Danske Bank A/S)http://www.fxstreet.com/fundamental/analysis-reports/flash-comment/2012-02-08.htmlhttp://www.fxstreet.com/fundamental/analysis-reports/flash-comment/2012-02-07.htmlCancel the technical recession for now The latest stream of data suggests the UK might not be in a mild technical recession after all. That fits nicely with our less-pessimistic-than-consensus-stance, and we expect other forecasters to revise their projections higher over the next couple of weeks, in line with ours. Retail sales in December were good – up 2.6% y/y – and PMI data for the service sector in January were excellent – rising to 56, suggesting strong expansion. So we would not be tooTue, 07 Feb 2012 07:26:10 GMThttp://www.fxstreet.com/fundamental/analysis-reports/danskeresearch@danskebank.com (Danske Bank A/S)http://www.fxstreet.com/fundamental/analysis-reports/flash-comment/2012-02-07.htmlhttp://www.fxstreet.com/fundamental/analysis-reports/flash-comment/2012-02-06.htmlTens of thousands of protesters took to the streets of Russian cities on Saturday despite the freezing weather, a month before the presidential elections. There has not been any significant reaction in FX or the stock markets. The main questions relate to whether or not there will be a second round in the elections and their legitimacy. Assessment and outlook The political protests that started almost two months ago following the Duma elections continued last Saturday. Despite temperatures ofMon, 06 Feb 2012 16:08:01 GMThttp://www.fxstreet.com/fundamental/analysis-reports/danskeresearch@danskebank.com (Danske Bank A/S)http://www.fxstreet.com/fundamental/analysis-reports/flash-comment/2012-02-06.htmlhttp://www.fxstreet.com/fundamental/analysis-reports/flash-comment/2012-02-03.htmlUS non-farm payrolls surprised on the upside, rising 243k. Net revisions in previous months were +3k. This was stronger overall than consensus of 140k and our estimate of 135k. The unemployment rate also surprised by falling further to 8.3% – the lowest level in three years. The payrolls income proxy rose 5.3% (3M AR), which provides a solid base for consumption growth. With the second major gain in a row, the 3M average is still around 201k – unchanged from the previous two months. We believeFri, 03 Feb 2012 15:30:21 GMThttp://www.fxstreet.com/fundamental/analysis-reports/danskeresearch@danskebank.com (Danske Bank A/S)http://www.fxstreet.com/fundamental/analysis-reports/flash-comment/2012-02-03.htmlhttp://www.fxstreet.com/fundamental/analysis-reports/flash-comment/2012-02-02.htmlBudget deficit set to comply with EMU requirement While Denmark has long looked likely to breach the EMU 3% budget deficit criterion in 2011, the deficit on Danish government finances last year now looks set to come in below 3% of GDP. Like the government, in our most recent forecast we projected a deficit of more than DKK70bn, or just over 4% of GDP. However, revenue from the pension return tax now looks likely to exceed expectations by a wide margin, with pension revenue headed for a recordThu, 02 Feb 2012 19:45:46 GMThttp://www.fxstreet.com/fundamental/analysis-reports/danskeresearch@danskebank.com (Danske Bank A/S)http://www.fxstreet.com/fundamental/analysis-reports/flash-comment/2012-02-02.htmlhttp://www.fxstreet.com/fundamental/analysis-reports/flash-comment/2012-02-01.v02.htmlThe US ISM manufacturing index was slightly lower than expected, rising to 54.1 (consensus 45.5, Danske 55.0) from 53.1. The details were stronger with the new orders index rising again to the highest level since April last year and the export orders index rising for the third month in a row. The number confirms that growth in the US continues at a moderate pace around 2.5% at the beginning of 2012 and that the global economy is doing better. We look for a further slight rise in ISMWed, 01 Feb 2012 16:47:46 GMThttp://www.fxstreet.com/fundamental/analysis-reports/danskeresearch@danskebank.com (Danske Bank A/S)http://www.fxstreet.com/fundamental/analysis-reports/flash-comment/2012-02-01.v02.htmlhttp://www.fxstreet.com/fundamental/analysis-reports/flash-comment/2012-02-01.htmlChina’s NBS manufacturing in January beat expectations and improved slightly from 50.3 to 50.5. The details are relatively strong with the new order inventory balance continuing to improve. So far there are no signs of a hard landing of the Chinese economy but, on a cautionary note, there are indications that China’s imports of particularly commodities could slow in the coming months despite some improvement in the overall economy. The January manufacturing PMIs also improved in Japan, India,Wed, 01 Feb 2012 10:48:44 GMThttp://www.fxstreet.com/fundamental/analysis-reports/danskeresearch@danskebank.com (Danske Bank A/S)http://www.fxstreet.com/fundamental/analysis-reports/flash-comment/2012-02-01.htmlhttp://www.fxstreet.com/fundamental/analysis-reports/flash-comment/2012-01-30.v02.htmlToday Lithuanian Statistics published the flash estimate of GDP growth for Q4 11. The GDP growth rate decelerated to 4.3% y/y, significantly down from the revised 6.7% y/y in Q3 11. Despite some negative surprises in the last quarter annual growth in 2011 was 5.8%, only marginally lower than our expectations (6.0%). Details Lithuanian GDP increased by 4.3% y/y in Q4 11, down from 6.7% y/y in Q3 11. The outcome was marginally lower that our forecast (5.0% y/y). Assessment and outlook TheMon, 30 Jan 2012 12:35:07 GMThttp://www.fxstreet.com/fundamental/analysis-reports/danskeresearch@danskebank.com (Danske Bank A/S)http://www.fxstreet.com/fundamental/analysis-reports/flash-comment/2012-01-30.v02.htmlhttp://www.fxstreet.com/fundamental/analysis-reports/flash-comment/2012-01-30.htmlRouble outlook: Russian macro fundamentals have remained strong and political uncertainty has not escalated. However, as the global outlook remains blurred, the rouble has only moderate potential to strengthen in the short term. EUR/USD outlook: As the European debt crisis continues and the ECB has started to cut interest rates, we expect the euro to depreciate further in the coming months against the US dollar. EUR/RUB recommendation: Due to global uncertainty, we recommend keeping a highMon, 30 Jan 2012 11:07:54 GMThttp://www.fxstreet.com/fundamental/analysis-reports/danskeresearch@danskebank.com (Danske Bank A/S)http://www.fxstreet.com/fundamental/analysis-reports/flash-comment/2012-01-30.htmlhttp://www.fxstreet.com/fundamental/analysis-reports/flash-comment/2012-01-27.htmlUS GDP growth disappointed in Q4 rising only 2.8% vs. consensus of 3.0%. More disappointing were the details showing only 2.0% growth in private consumption and inventories adding almost two percentage points. Main drags come from government consumption and net exports. Fixed investment also slowed, but this was less of a surprise following weak capital goods orders. Looking ahead we expect continued growth around 2.5-3%. In 2013 we should see a recovery in exports and consumption growthFri, 27 Jan 2012 16:42:16 GMThttp://www.fxstreet.com/fundamental/analysis-reports/danskeresearch@danskebank.com (Danske Bank A/S)http://www.fxstreet.com/fundamental/analysis-reports/flash-comment/2012-01-27.htmlhttp://www.fxstreet.com/fundamental/analysis-reports/flash-comment/2012-01-26.htmlThe Fed surprised the market by announcing that rates are expected to be exceptionally low at least through late 2014 – almost three years from now! This was one year later than we expected. However, exceptionally low does not necessarily mean unchanged rates, as 11 out of 18 members see the rate higher than the current rate in late 2014. This was a bit of a surprise. There is a wide dispersion between Fed members’ estimates of the first hike with three members wanting a rate hike already inThu, 26 Jan 2012 10:00:04 GMThttp://www.fxstreet.com/fundamental/analysis-reports/danskeresearch@danskebank.com (Danske Bank A/S)http://www.fxstreet.com/fundamental/analysis-reports/flash-comment/2012-01-26.htmlhttp://www.fxstreet.com/fundamental/analysis-reports/flash-comment/2012-01-25.htmlThe Ifo expectations increased again and current condition was close to unchanged. It appears that the forward-looking Ifo index bottomed out in October. We expect Ifo expectations to increase moderately and to stay in line with very moderate positive growth in Q1. Our Ifo expectations model also points to further increases. Today’s release added upside risk to our estimate of zero growth q/q in Q1 in Germany. We forecast German growth in 2012 of 0.8% and 1.9% in 2013. Ifo expectationsWed, 25 Jan 2012 11:21:02 GMThttp://www.fxstreet.com/fundamental/analysis-reports/danskeresearch@danskebank.com (Danske Bank A/S)http://www.fxstreet.com/fundamental/analysis-reports/flash-comment/2012-01-25.htmlhttp://www.fxstreet.com/fundamental/analysis-reports/flash-comment/2012-01-24.v02.htmlEuro area PMIs surprised positively again in January. Composite PMI rose to 50.4 from 48.3. Hence, we are back above the boom-bust level. The improvement supports our view that the sharpest drop in production happened in Q4. We expect the euro area to be in a mild recession with negative growth in Q4 and Q1. The euro area economy faces strong headwinds from ongoing fiscal consolidation and the deleveraging in the bank sector. Details and outlook Euro area flash manufacturing PMI rose to 48.7Tue, 24 Jan 2012 10:47:57 GMThttp://www.fxstreet.com/fundamental/analysis-reports/danskeresearch@danskebank.com (Danske Bank A/S)http://www.fxstreet.com/fundamental/analysis-reports/flash-comment/2012-01-24.v02.htmlhttp://www.fxstreet.com/fundamental/analysis-reports/flash-comment/2012-01-24.htmlWhen Fed announces rates and presents new projections on Wednesday, it will mark a historical day in Fed communication. For the first time Fed will provide projections for the Fed funds rate based on the individual members’ forecast. We expect Fed to forecast the first hike at the end of 2013, which is slightly earlier than the market currently projects. We thus see upside risk to bond yields in response to the statement and press conference. USD could get a lift short term but given that theTue, 24 Jan 2012 09:30:41 GMThttp://www.fxstreet.com/fundamental/analysis-reports/danskeresearch@danskebank.com (Danske Bank A/S)http://www.fxstreet.com/fundamental/analysis-reports/flash-comment/2012-01-24.htmlhttp://www.fxstreet.com/fundamental/analysis-reports/flash-comment/2012-01-20.v02.htmlThe flash estimate for China’s HSBC manufacturing PMI in January only improved marginally from 48.7 to 48.8. However, the details were stronger with new orders and export orders improving markedly and inventory and current output declining. This suggests that the weakness is increasingly driven by a inventory adjustment, while there are signs of improvement in final demand. While today’s PMI still suggests subdued growth in early 2011, there are signs of stabilisation. While growth will remainFri, 20 Jan 2012 08:30:38 GMThttp://www.fxstreet.com/fundamental/analysis-reports/danskeresearch@danskebank.com (Danske Bank A/S)http://www.fxstreet.com/fundamental/analysis-reports/flash-comment/2012-01-20.v02.htmlhttp://www.fxstreet.com/fundamental/analysis-reports/flash-comment/2012-01-20.htmlThis morning, Hungarian Prime Minister Viktor Orban in an interview with public radio MR1-Kossuth said that the government will scrap plans to merge the financial regulator PSZAF and the Hungarian central bank (MNB). This effectively means that the Hungarian government has caved into the demands of the IMF and the European Commission and now seems to be guaranteeing the independence of the central bank. This should open the door for a new IMF deal for Hungary, and even though the IMF and theFri, 20 Jan 2012 08:18:59 GMThttp://www.fxstreet.com/fundamental/analysis-reports/danskeresearch@danskebank.com (Danske Bank A/S)http://www.fxstreet.com/fundamental/analysis-reports/flash-comment/2012-01-20.htmlhttp://www.fxstreet.com/fundamental/analysis-reports/flash-comment/2012-01-17.v02.htmlS&P downgraded nine euro area countries on Friday night after the US close. France and Austria were downgraded by one notch, while Italy and Spain were downgraded two notches. Germany, Finland and the Netherlands‟ AAA rating was affirmed. Rumours of the rating verdict triggered negative sentiment on Friday, sending EUR/USD sharply lower and stock indices down, while „safe-haven‟ bonds rose. Stock indices are also trading in negative territory in Asia this morning. Friday‟s downgrades couldTue, 17 Jan 2012 13:14:09 GMThttp://www.fxstreet.com/fundamental/analysis-reports/danskeresearch@danskebank.com (Danske Bank A/S)http://www.fxstreet.com/fundamental/analysis-reports/flash-comment/2012-01-17.v02.htmlhttp://www.fxstreet.com/fundamental/analysis-reports/flash-comment/2012-01-17.htmlChina’s GDP growth in Q4 beat expectations and declined only slightly from 9.1% y/y to 8.9% y/y. Industrial production and retail sales were also better than expected in December, suggesting that the economy might have improved slightly in late 2011. At the current juncture it appears that China is able to manage a soft landing. However, weak fixed investment data underscore that a weak property market remains a major downside risk for China. With no signs of a sharp deterioration of theTue, 17 Jan 2012 13:10:38 GMThttp://www.fxstreet.com/fundamental/analysis-reports/danskeresearch@danskebank.com (Danske Bank A/S)http://www.fxstreet.com/fundamental/analysis-reports/flash-comment/2012-01-17.htmlhttp://www.fxstreet.com/fundamental/analysis-reports/flash-comment/2012-01-12.htmlInflation in China in December declined slightly from 4.2% y/y to 4.1% y/y, hence easing for the fifth month in a row. The pace of the decline is mainly slowing due to seasonal distortions from an early Chinese New Year holiday in 2012. Due to the seasonal distortions inflation is expected to temporarily increase in January, but in February inflation should drop substantially below 4% y/y and continue to edge lower in the following months to below 3.5% y/y. The continued decline in inflationThu, 12 Jan 2012 13:20:15 GMThttp://www.fxstreet.com/fundamental/analysis-reports/danskeresearch@danskebank.com (Danske Bank A/S)http://www.fxstreet.com/fundamental/analysis-reports/flash-comment/2012-01-12.htmlhttp://www.fxstreet.com/fundamental/analysis-reports/flash-comment/2012-01-11.htmlToday the Polish central bank’s (NBP) monetary policy council (RPP) kept its key policy rate unchanged at 4.5%. This was also our expectation and consensus. However, the comments from the RPP following the rate decision were relatively hawkish. That said, the moderately hawkish comments did not move the Polish FX and fixed income markets in any major way. Despite the risks to Polish growth seeming to be on the downside, the RRP is not turning dovish. This is, in our view, a consequence of theWed, 11 Jan 2012 16:27:37 GMThttp://www.fxstreet.com/fundamental/analysis-reports/danskeresearch@danskebank.com (Danske Bank A/S)http://www.fxstreet.com/fundamental/analysis-reports/flash-comment/2012-01-11.htmlhttp://www.fxstreet.com/fundamental/analysis-reports/flash-comment/2012-01-10.htmlChinese import growth slowed more than expected in December, suggesting that imports have now finally begun to adjust to the unsustainably strong growth in the previous months. Given that imports of commodities had been particularly strong in the previous months, we think this area could suffer in the coming months. On a positive note, there are signs of stabilisation in Chinese exports. In particular, exports to the EU appear to have stabilised. Based on today’s numbers, we estimate thatTue, 10 Jan 2012 13:06:05 GMThttp://www.fxstreet.com/fundamental/analysis-reports/danskeresearch@danskebank.com (Danske Bank A/S)http://www.fxstreet.com/fundamental/analysis-reports/flash-comment/2012-01-10.htmlhttp://www.fxstreet.com/fundamental/analysis-reports/flash-comment/2012-01-09.htmlLithuanian CPI inflation in December decelerated to 3.4% y/y down from 4.4% y/y in November – the outcome was lower than our forecast of 3.6% y/y. Latvian CPI decelerated to 4.0% from 4.2% y/y in December and was in line with our forecast (4.0% y/y). Details Lithuania and Latvia Statistics today published CPI inflation numbers for December. Consumer prices in Lithuania fell by 0.2% m/m mainly due to a seasonal decrease in prices for clothing and footwear and lower central heating consumptionMon, 09 Jan 2012 19:19:34 GMThttp://www.fxstreet.com/fundamental/analysis-reports/danskeresearch@danskebank.com (Danske Bank A/S)http://www.fxstreet.com/fundamental/analysis-reports/flash-comment/2012-01-09.htmlhttp://www.fxstreet.com/fundamental/analysis-reports/flash-comment/2012-01-06.htmlEstonian CPI inflation fell from 4.2% in November to 3.7% y/y in December. The outcome was slightly higher than our forecast of 3.5% y/y but lower than the consensus expectation of 3.8% y/y. Average annual inflation of 5.0% was in line with our expectation. Details Estonian inflation declined further in December to 3.7% y/y from 4.2% y/y in November; on a month-on-month basis, the decline was 0.1%. Inflation in December was mainly influenced by a 0.9% m/m increase in transport and a 2% m/mFri, 06 Jan 2012 16:54:13 GMThttp://www.fxstreet.com/fundamental/analysis-reports/danskeresearch@danskebank.com (Danske Bank A/S)http://www.fxstreet.com/fundamental/analysis-reports/flash-comment/2012-01-06.htmlhttp://www.fxstreet.com/fundamental/analysis-reports/flash-comment/2012-01-03.v02.htmlThe National Bureau of Statistics (NBS) manufacturing PMI in December improved slightly from 49.0 to 50.3 suggesting that while growth remains subdued in Q4 the Chinese economy does not appear to be deteriorating further. Other manufacturing PMIs released across Asia also showed signs of stabilisation. With no signs of a sharp deterioration in the economy, we also expect the policy response to be cautious in the coming months. We expect the reserve requirement to be cut by at least 150bp in H1Tue, 03 Jan 2012 15:22:08 GMThttp://www.fxstreet.com/fundamental/analysis-reports/danskeresearch@danskebank.com (Danske Bank A/S)http://www.fxstreet.com/fundamental/analysis-reports/flash-comment/2012-01-03.v02.htmlhttp://www.fxstreet.com/fundamental/analysis-reports/flash-comment/2012-01-03.htmlTurkish inflation continues to rise and is now back in double-digit territory. Consumer prices grew by 10.2% y/y, bringing the average inflation for 2011 to 10.5%. Producer prices rose 13.7% y/y. The continued rise in inflation in the Turkish economy is mostly the result of higher food prices and as such the central bank can say it is not to blame. However, to us it is evident that monetary policy has been overly loose for quite a while with the money supply growing strongly and one can hardlyTue, 03 Jan 2012 15:15:20 GMThttp://www.fxstreet.com/fundamental/analysis-reports/danskeresearch@danskebank.com (Danske Bank A/S)http://www.fxstreet.com/fundamental/analysis-reports/flash-comment/2012-01-03.htmlhttp://www.fxstreet.com/fundamental/analysis-reports/flash-comment/2011-12-23.htmlSummary and outlook With increasing focus on the Chinese property market we initiate a more intense monitoring of the Chinese property market. We intend to publish our monitor every month based on the release of the monthly house price data. House prices continued to decline in November, albeit at a moderate pace. The current downward pressure on house prices is driven mainly by increased supply of new homes. House sales have been more resilient, but show major regional differences. WithFri, 23 Dec 2011 14:07:06 GMThttp://www.fxstreet.com/fundamental/analysis-reports/danskeresearch@danskebank.com (Danske Bank A/S)http://www.fxstreet.com/fundamental/analysis-reports/flash-comment/2011-12-23.htmlhttp://www.fxstreet.com/fundamental/analysis-reports/flash-comment/2011-12-22.htmlBad policies triggers downgrade to “junk” The credit rating agency Standard & Poor’s has cut Hungary’s long- and short-term foreign- and local- currency sovereign credit ratings by one notch to BB+ from BBB-. S&P assigned a negative outlook to the rating. Moody’s lowered its assessment to Ba1 on 24 November, while Fitch Ratings has assigned its lowest investment grade, BBB-. Hence, Hungary is now junk at two rating agencies – Moody’s and S&P. S&P had rated Hungary investmentThu, 22 Dec 2011 13:35:15 GMThttp://www.fxstreet.com/fundamental/analysis-reports/danskeresearch@danskebank.com (Danske Bank A/S)http://www.fxstreet.com/fundamental/analysis-reports/flash-comment/2011-12-22.htmlhttp://www.fxstreet.com/fundamental/analysis-reports/flash-comment/2011-12-19.htmlIrish GDP contracted sharply in Q3 posting a quarterly decrease of 1.9%, which could push Ireland back into recession if GDP declines again in Q4. Ireland’s large export sector continues to be the good news story, though the effect of the continued austerity measures is weighing heavily on domestic demand. We now believe that the Irish economy will grow 0.8% in 2011, with modest growth of 1% in 2012 being led by the export sector. Irish Q3 GDP very weak Irish GDP contracted sharply in Q3Mon, 19 Dec 2011 15:47:47 GMThttp://www.fxstreet.com/fundamental/analysis-reports/danskeresearch@danskebank.com (Danske Bank A/S)http://www.fxstreet.com/fundamental/analysis-reports/flash-comment/2011-12-19.htmlhttp://www.fxstreet.com/fundamental/analysis-reports/flash-comment/2011-12-15.v03.htmlHSBC manufacturing PMI improved slightly in December from 47.7 to 49.0, but still suggests that GDP growth will remain below 7% q/q AR in Q4 11. Export orders fell but remained above 50, suggesting that while China faces headwinds from weaker exports, these are less severe than in the wake of the financial meltdown in 2008. We have lowered our GDP growth forecasts for Q4 11 and Q1 12. The Chinese leadership has signalled that fiscal and monetary policy will become more growth supportive andThu, 15 Dec 2011 14:30:53 GMThttp://www.fxstreet.com/fundamental/analysis-reports/danskeresearch@danskebank.com (Danske Bank A/S)http://www.fxstreet.com/fundamental/analysis-reports/flash-comment/2011-12-15.v03.htmlhttp://www.fxstreet.com/fundamental/analysis-reports/flash-comment/2011-12-15.v02.htmlChina’s policymakers this week have signalled that economic policy will become more pro-growth in 2012, although at this stage they see no need to use the ‘big bazooka’. Hence all the tightening measures targeting the property sector, introduced over the past two years, will remain in place for now. It also appears that the Chinese government prefers easing fiscal policy to easing monetary policy. In the coming months we expect the policy response from China to be monetary easing through cutsThu, 15 Dec 2011 14:13:50 GMThttp://www.fxstreet.com/fundamental/analysis-reports/danskeresearch@danskebank.com (Danske Bank A/S)http://www.fxstreet.com/fundamental/analysis-reports/flash-comment/2011-12-15.v02.htmlhttp://www.fxstreet.com/fundamental/analysis-reports/flash-comment/2011-12-15.htmlWe have revised our outlook for Finland and cut our GDP forecast to -1.0% for 2012. This is mainly due to the continued euro crisis that doesn’t leave export-driven Finland untouched. Risks are currently to the downside even to this estimate for next year. The domestic market has held up well. Private consumption rose 3.7% between January and September 2011. In particular, durable goods were a positive surprise with an increase of 9% over the same period. Figures show that consumers are stillThu, 15 Dec 2011 13:22:04 GMThttp://www.fxstreet.com/fundamental/analysis-reports/danskeresearch@danskebank.com (Danske Bank A/S)http://www.fxstreet.com/fundamental/analysis-reports/flash-comment/2011-12-15.htmlhttp://www.fxstreet.com/fundamental/analysis-reports/flash-comment/2011-12-12.htmlGrowth in China’s exports and imports both beat expectations substantially in November, but the year-on-year growth in exports and imports nonetheless continues to decline. However, sequentially there are tentative signs of improvement, with exports in November increasing month-on-month for the first time in four months. Exports to Europe are weak, but this appears to some degree to have been offset by improving exports to the rest of Asia and the US. China’s imports have been surprisinglyMon, 12 Dec 2011 14:28:42 GMThttp://www.fxstreet.com/fundamental/analysis-reports/danskeresearch@danskebank.com (Danske Bank A/S)http://www.fxstreet.com/fundamental/analysis-reports/flash-comment/2011-12-12.htmlhttp://www.fxstreet.com/fundamental/analysis-reports/flash-comment/2011-12-09.htmlAs expected, the ECB reversed its summer hikes by cutting interest rates by another 0.25 %, bringing the refinancing rate back to 1%. It seems that a 0.5% rate cut was not even discussed. We still expect the ECB to deliver another 0.25% rate cut in January and then keep rates unchanged for a prolonged period. At the press conference, Draghi surprised positively by announcing 36-month long term refinancing operations (we expected 24 months), widening eligibility criteria for collateral moreFri, 09 Dec 2011 16:28:15 GMThttp://www.fxstreet.com/fundamental/analysis-reports/danskeresearch@danskebank.com (Danske Bank A/S)http://www.fxstreet.com/fundamental/analysis-reports/flash-comment/2011-12-09.htmlhttp://www.fxstreet.com/fundamental/analysis-reports/flash-comment/2011-12-05.htmlIt looks as though the IMF will attempt to create a third line of defence against the European debt crisis by increasing its involvement and sending a clear signal that in a worst case scenario the IMF will be able to help cover the finance requirement of  Italy and Spain. However, for this commitment to be credible the IMF will need to boost its resources substantially. The IMF solution could be attractive because it can be used to circumvent some of the institutional weakness in theMon, 05 Dec 2011 13:30:23 GMThttp://www.fxstreet.com/fundamental/analysis-reports/danskeresearch@danskebank.com (Danske Bank A/S)http://www.fxstreet.com/fundamental/analysis-reports/flash-comment/2011-12-05.html