Danske Daily. Today's key points

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1 Investment research Danske Daily March 11, 2009 Editor: Allan von Mehren, , Today's key points US stocks rally over 6% on upbeat comments from Citigroup. Bond yields rose further. NOK and SEK gains on higher risk appetite. Fed might consider buying treasuries when it meets next week. The macro calendar is very thin today. German factory orders and inflation expectations survey in Norway are the only releases of interest. Markets Overnight Equity markets were on fire yesterday as Citigroup CEO Vikram Pandit delivered a very upbeat message in an internal memo to all Citigroup employees. Pandit said Citigroup had a strong start to 2009 and had its best profit performance in over a year. The message came as a complete surprise to the market as focus lately rather has been on Citigroups ability to survive as a private bank. The Citigroup share price rose 38% on the day and US stocks rose throughout the session with the S&P 500 ending up 6.4% the strongest daily increase since November last year. The rise in risk appetite has also benefited the credit market which saw a tightening of credit spreads. The stock market rally continued in Asia where the S&P future is up close to 1%. Nikkei is up 4.5%. Japanese machine orders were released overnight and fell 39.5% y/y close to consensus expectations of %. Metal prices and the Baltic Freight Rate rose again yesterday, inspired by the rise in equity markets and signs of an Asian recovery. According to the Wall Street Journal (WSJ), the Fed is considering increasing its asset purchase programme. WSJ reports that the Fed may again be looking at buying treasuries after the success of the Bank of England last week in pushing UK yields markedly lower. The Fed is due to meet next week to decide whether new measures should be taken. Bond yields continued to rise yesterday on the back of the sharp rise in equities and continued supply worries. The 10-year US bond yield is again trading above 3.0%. In the FX market the CHF has weakened a bit further overnight while the JPY and EUR are broadly unchanged. SEK and NOK both strengthened yesterday and overnight on the rise in risk appetite. EUR/SEK and EUR/NOK are trading around and 8.85 respectively this morning.

2 Today's events Period Our forecast Consensus Latest CNY Trade balance USD bn Feb :30 AUD Wespac consumer confidence Mar -4.6% 00:50 JPY Machine orders m/m y/y Jan -5.0% -40.2%-1.7% -26.8% 00:50 JPY Domestic CGPI m/m y/y Feb -0.6% -1.2% -1.0% -0.2% 09:30 DKK Current account DKK bn Jan :00 NOK Norges Bank inflation expectations survey 10:30 GBP Trade balance GBP bln. Jan :00 DEM Industrial orders m/m y/y Jan -2.5% % -26.5%-6.9% -25.1% 12:00 USD MBA mortgage applications % :00 USD Budget statement USD bn Feb :30 NZD PMI Index Feb 42 Global Daily The improved sentiment on equity markets and focus on supply in the US sent yields higher on both sides of the Atlantic yesterday. US yields continued higher after the close in Europe, and a negative opening could be on the cards in European bond markets this morning. The US treasury is selling USD18bn in 10-year notes today, so supply will remain in focus along with the equity markets. US 10 year treasury yields are back at 3% its highest level since November last year and it will be interesting to see if it moves significantly above this threshold in the coming days. German factory orders are the only interesting economic data on the agenda today. We expect a decline of 2.7%. This is clearly a bad number for the economy, but it will be less atrocious than the collapse in factory orders seen in recent months. The tendency in FX markets was clear yesterday; while equity prices soared, defensive, low-risk currencies were left in the cold and high-beta currencies rallied. It seems like the pound can depreciate in both negative and positive markets, while the euro tends to be positively correlated with risk appetite, at least against the US dollar. Ahead of the German factory orders data today (12:00 CET), we prefer not to be long euros, as the numbers are set to exhibit the abrupt downturn in European activity. Long USD positions are on the other hand not recommended prior to the release of the US budget statement (19:00 CET). Once again, focus in FX markets will probably be elsewhere than on scheduled data releases. Scandi Daily The SEK outperformed all other G10 currencies yesterday in a genuine equity rally despite data showing that industrial production and orders merely collapsed and the activity index plunged. In fact, there is no worse development in industrial production on record in Sweden. This illustrates exactly what has been the problem for the SEK for a very long time; markets have simply been too downbeat to foster a SEK comeback even though almost everybody has agreed that the currency has been substantially undervalued and possessed huge potential. A couple of days with steadily positive, but less aggressive, stock markets and EUR/SEK can easily drop below 11, where it eventually belongs. In Norway we received inflation data yesterday and it turned out, once again, that core inflation is far higher than expected. This underlined our long-held view that although the Norwegian economy will suffer from the global crisis, it is in a better economic situation with higher domestic cost pressures than most places elsewhere. While we still expect another 50bp cut by Norges Bank bringing the folio rate down to 2% flat, we have a hard time seeing Norges Bank keeping up with other central banks and cutting further than that. There are no major key macro figures due out today in Scandinavia. Inflation expectations in Norway and Labour Market Board data for unemployment in Sweden are both due, but neither is likely to be a market mover. Rather, the fate of the Scandinavian markets is likely to be dictated by factors such as the equity market and possible news of crisis management in the CEE countries. DANSKE BANK 2

3 Fixed Income 17:00 07:3 0, bp USD 10Y USD 30Y JPY 10Y :30(-1)* :0 0 1, bp DEM 10Y DKK 10Y SEK 10Y NOK 10Y PLN 10Y * As of closing previous trading day FX EUR 17:0 0 07:30 USD JPY GBP NOK SEK DKK PLN USD 17:0 0 07:30 JPY GBP CHF DANSKE BANK 3

4 Today's market data STOCKS Close S&P500 Intrad ay, % Eurostoxx Intraday, % DJSTOXX Max 6.5 Max 5.8 OMXC Min -0.1 Min -0.5 OMXS OSE B X Close Ti me DOW JONES 6926 Grey line indicates closing of Danish markets Grey li ne in d ic at e s op ening of US ma rke t s NASDAQ month -13.7% 1 month -14.2% S&P Ye ar-to-date -20.3% Ye ar-to-date -18.3% NIKKEI (07:30) % 4.6% 5.4% 3.4% 5.8% 7.1% 6.4% 4.6% FX & COM MODITIES EU R/USD Intraday EU R 17:00 07:30 +/ - Go ld, $ Oil, Bre nt, $ USD : JPY day Max 129 GB P month Min 126 NOK Year-t-date SEK DKK CRB CRB, Raw PLN M future Industrials USD 17:00 07:30 07: JPY day month GB P month Ye ar-to-date CHF Year-t-date YIELDS & INTEREST RATES USD-Yields Intraday Policy R ate 3M Spread, bp 17:00 07:30, bp USD2Y USD10Y USD USD 10Y Max 1.1 Max EUR USD 30Y Min 0.9 Min GB P JPY 10Y DKK SEK :30(-1 )* 17:00, bp NOK DEM 10Y PLN D KK 10Y USD2Y (left axis) SEK 1 0Y USD10Y (right axis) NOK 10Y PLN 10Y * As of closing previous trading day Y Yield S pread to Germany USD JPY GBP FRF ITL DKK SEK NOK PL N US Yield Curve Ge rman Yield Curve Max ### Max ### Min ### 1.00 Min ### USD2Y USD5Y USD10Y DEM2Y DEM5Y DEM10Y D-t-D (right axis) 0 7:30 ( left ax is ) 1 month ago (left axis) D-t-D (right axis) 07:30 (left axis) 1 month ago (left axis) Credit s prea d, itraxx s. 10 * Swap Rates** Swap Spread, bp** 17:00 07:30,bp 1 7:00 0 7:30 07:3 0 1 da y 1 month USD 10Y USD 10Y Europe JPY 10Y JPY 10Y HiVol C rosso ve r :30(-1)* 17:00,bp 07:30(-1 )* 17:00 EU R 10Y EUR 10Y D KK 10Y D KK 10Y Finan. Sr SEK 1 0Y SEK 10Y Finan. Sub NOK 10 Y NOK 10Y No n-fin an PLN 10Y * As of closing previous trading day * As of closing previous trading day * Ask price ** Ask price ** Ask price Source: Bloomberg 7:30(-1 ) og 17:00 refers to the pre vious (trad e) day DANSKE BANK 4

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