We suspect that Swedish and Swiss government bond yields will come down again before long given the strong relationship with Bunds and the prospect of the ECB stepping in. However, our hawkish view that the Norges Bank will start to hike rates in Q3 justifies higher bond yields there, particularly at the short end of the curve. Next week, the release of Swiss CPI data for February is set to show that the core rate edged into positive territory for the first time in 12 months, while the manufacturing PMIs for February are likely to point to rising price pressures from supply problems.
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