Good afternoon and welcome to this Nordea weapon are marking the release of our brand New Nordea Economic Outlook. Unrestricted growth. My name is Terry Baynes, and today I am very happy to be joined by Nordea's Group Chief Economist Helge Peterson. He will walk us through the highlights from the report. Just a few highlights to begin with the webinar will last roughly 30 minutes, Helge will give his presentation for the first part, and then we'll take the Q and A at the end. You're welcome to submit your questions via the question function in the webinar tool, and we will send out a recording of the webinar today. So without any more for me, let me hand it over to Helge. Thanks a lot, Terry. It's a great pleasure for me able to walk you through on new economic outlook. Terry already has mentioned it's named Unrestricted Growth, and it's actually referring to the situation that most countries will eventually soon be without Corona restrictions, which then can make growth ballooning. Now I would awful much like to show you something but. There's my presentation's so that's great. Thanks a lot for that and you can see this is the new outlook and you can download it from Nordea's home page to get everything on board. But some off the main conclusions are that the global economy is right now heading for the strongest upswing for almost 50 years and it's driven by the efficient vaccination programmes which we're seeing progressing in the most of the advanced economies and then an unprecedented policy accommodation. Also the Nordic countries, they have been faring very well during the most of the pandemic and they will also see a very strong recovery. But it has already started, but it will last over the coming years, driven by release of pent up demand and also much better conditions for the export sector as the rest of the world is getting reopened. We are in a situation now where we have a kind of a dual economy. It's not just the differences between the advanced economies and the developing economies, but it's also about the sectors domestically. There's a huge difference between the situation in the goods sectors, which have been doing excellent for many cases during the pandemic and then to the services sector, which is still some parts of it remains extremely hard hit. I will also speak a bit about one of the big topics today, which is the inflation situation. It is on the rise and it's driven by a sharp increase in commodity prices and also bottlenecks within the supply chain. That has had any impact already on long-term interest rates. But to my mind, the monetary policy will still remain accommodative for while for some years, actually, which will then support house and equity markets for for some time. And lastly then I will mention that risks are still mainly related to the pandemic to the upcoming of, say, new variants which are not covered by the vaccinations which are being given today and then also, some geopolitical risks can pop up again, say in the Middle East, or maybe even also in Southeast Asia. But to pinpoint some of my major points, if you look at the left hand slide, then we can see the global PMIs, the purchasing managers index, you can see that it is well above the 50 threshold between increasing and decreasing economic activity both when it comes to manufacturing, but also to the service sector now on a global scale. So the composite index is very high now, indicating that there will be a strong growth in the months, quarters to come. On the right hand slide. You can also see that global trade has increased significantly and is already back above its long-term trend growth rates. So world trade is doing fine again. That's something which will help the situation in the small, open economists like the Nordics. If we look at the left hand slide here, then we can see how far the countries have come in the recovery. And it's a visible that China is doing the best. So far, we have data for the first quarter and China and the Chinese GDP level is already close to 7% above the pre-Covid-19 level. Also, the U.S. is getting close to the pre-Covid-19 level, while Norway, Denmark, Finland and Sweden follow suit. They only need, say, around a few percentage points GDP more to be back at the pre-Covid-19 level. That's quite amazing, not least when you compare it to the situation in most other European countries, as you can see from the graph then the Euro area is still lacking more than 6%. And a country like Spain, which is really dependent on tourism, is still lacking close to 10% of its production to be back on the pre-Covid-19 level. So let's hope for the Spaniards that they will have a good tourist season. They really need it. If we look at the growth, then we expect and you can see that in the table the global growth to be 5.8% this year. As mentioned earlier on, that's almost or that is the highest for almost 50 years. We have to go back to 1973 to find as high growth a rate in the global economy. Advanced economies 4.8%. The U.S. spearheading the development in the advanced economies, helped by all the support packages from the new Biden administration, will experience a growth of more than 6% this year. And if we look at the Nordic countries then, Denmark will be up by 3%; Norway by 3.5%; Sweden by no less than 4.5%. But also Finland will do really well this year with a growth off 3% GDP. So a strong recovery taking place in all of the Nordic countries, and it's actually so strong that all off them during 2021 will be back on pre-Covid-19 level. That is much earlier than we had expected earlier on. So good prospects for the global economy. Of course, everything depends on how Covid-19 evolves. We do see that new mutations are popping up all over. I've just recently heard about a Mexican variant, which has come to Denmark. We have the Indian one as well and so on and so forth. But for the moment being, it seems like that the vaccinations given so far they work well, and we see that in most of the countries, the incidences are declining and to the graph to the to the left hand. You see at least the Danish incident threshold for the foreign minister to recommend if you travelled to a given country or not, it is 50 right now, and the case incidence is actually lower than that already in countries like Iceland, United Kingdom of Portugal, Finland, Slovakia, which was hit hard just a few months ago, is now below the 50 threshold. Then if you look in the other end of the scale, then you find that it is still difficult for the Swedish authorities to get really an effective hand on the situation. Sweden is still having a high incidence number but also other popular tourist destinations like Cyprus, Croatia, Turkey are still suffering with relative high numbers of Covid-19 new numbers of cases of Covid-19. So the recommendation by now would be If you want to make sure that you can go to a country during your summer holidays, then go to Portugal or Spain, that is at least where they seem to have a really good control over the situation. Everything also of course, depends on the rollout of the vaccination programmes, and here can just see Israel have been doing best. As we all know, almost 60% of the population has been fully vaccinated now in Israel, but also the UK and the US having quite efficient programmes. The EU is still trailing, but I'm relatively convinced that the number of injections will take speed here over the coming few weeks so also with most of the you countries, we would be able to have the reopened borders for the tourist season. One of the very big themes, as mentioned, is the development in inflation now. There's a lot of inflation fear in financial markets, and you could argue that it is for for some good reasons. We have seen a very strong increase in commodity prices over the past year. You have to bear in mind that this sharp increase comes from very low levels just in the aftermath of the collapse of the commodity markets, when Covid-19 really came to the Western economies in February/March last year. But the oil price is up by, as you can see on the left-hand slide, by 125%, but also agricultural livestock prices are up a lot and industrial metals as well, so there is right now a sharp increased cost pressure for many, many cooperates and remark also on the right hand scale that the Baltic Dry Index, which is an index for for shipping costs is actually on its highest for almost 10 years. So also transportation costs are increasing quite sharply right now to a very large extent due to some capacity problems because of the big demand for for goods which are being shipped to a completely different situation than, say, services. So the big demand for goods during the pandemic, the good growth prospects right now and also need for investment goods just simply makes that the demand for a lot of commodities right now and also for transportation exceeds the given capacity, which is why we can see in surveys like like like markets monthly surveys on input prices and product prices in the US that they have been rising sharply recently. Both when it comes to input prices and output prices. A large majority of the cooperates are now responding that they see a higher prices. So maybe not a lot, but at least to a certain part, that increase will also be passed through to consumers, which can be seen in the fact that consumer prices is on the rise now both in in the US and the Euro area, not least in the US, where the headline inflation rate now stands at 2.6%. That's above the 2% target set up by the Fed. But bear in mind that they have now changed it to an average target, so they will look through that prices, at least for a while, is increasing with a rate, which is higher than the 2% target. Also in financial markets in the expectations for prices going forward, you can see on the inflation swap forwards five years, five years, That's an expression for longer term inflation expectations in financial markets. Then they are now at the highest for a few years. And remark also that it has risen in the Euro area, but still markets' inflation expectations is well below the 2% target from the European Central Bank. So it is not least in the U.S. where we see higher growth, we see the very big fiscal packages being rolled out that inflation is the big theme for the moment being. It has had an impact already in financial markets. 10-year government bond yields have increased relatively sharply since the bottom reached in August last year. They have flattened out somewhat lately in the US and stand at around 1.6%, and in the Euro area 10-years govies are now approaching 0% when it comes to the benchmark German 10-year government bond yield. That means that also that bond yields have risen in the Nordics, where we're looking at spreads, they have been relatively stable over the past few months. We should still bear in mind that the Nordic countries are among those having the best of creditworthiness in the world, all of them being Triple A rated, just with an exception of Finland, but Finland will probably soon regain its Triple A rating amongst all of the the major rating agencies. Monetary policy will remain easy, as I have already mentioned. Right now, the Fed will probably over the coming months look through that inflation will exceed 2%. Maybe it can even reach and go above 3%. But they have a lot of focus now on the situation in the labour market. They do expect that some of the price increases are temporary due to some base effects, but also to the bottlenecks which we mentioned earlier on and usually in the longer term, then supplies are quite elastic and for most goods. So they are right now facing these increases in the inflation rate as temporary and focusing more on the situation in the labour market. And the objective is to create full employment, and as we can see on the graph to the right then, the unemployment rate now is 2.6% higher than before Covid-19, but still there need to be created close to eight million new jobs before way are in a situation with full employment in the US economy again. Last month only around 200,000 new jobs were created, and that would imply almost 40 months if it should sustain with that speed. But that labour market report was quite a disappointment. In months before it was close to one million new jobs which was being created, and now with the re opening of the US society, we should expect that there would be a fairly swift recovery in the labour market. But let's see for how many months it will take before we are again in a situation with full employment in the U.S. As long as there's not full employment, then monetary policy will in one way or another accommodate the real economy. And then when it comes to the sequencing, as you are aware then the central banks up both running big QE programmes, buying assets in the markets and then they are having the interest rate policy. And the sequencing is quite clear. They will first start tapering their asset purchases before they are even thinking about hiking interest rates. And our expectation is that they are considering when they should time a tapering that could take place maybe already this year in the US. We know that PEPP, the pandemic programme from the ECB, is running until March 2022, and maybe they will also start tapering before that. So the sequencing is clear, first tapering and then only hiking rates later on. And our best estimate is for now that the Fed is going to hike rates by the end of 2022, and the ECB at the earliest in 2023. Also in the Nordics, we see that inflation is increasing, but remark also that we're still having fairly low levels and not exceeding the average for the past many years. And it's not as high as in the pre-Covid-19 situation in most of the countries. So inflation is rising, but it's still not giving a reason for big worries about the governors in Nordic central banks. Where we will see the first hike taking place, that would be in Norway, as you can see on the right hand slide, then Norway were able to accommodate the economy by cutting rates by 1.5% point in the aftermath of the breakout of Covid-19 in Norway, and the situation in the Norwegian economy is pretty good now. We expect solid growth and inflation. As you can see, it's around 3% now, driven by the depreciation last year off the NOK and then higher electricity prices. But Bank of Norway will probably start normalising the monetary policy again already in September. So we expect Bank of Norway to hike rates twice this year, each by 25 basis points, while Riksbanken will be on hold until the end of our forecast horizon which is 2022, and they will keep their QE programme on track. We don't expect the Danish Central Bank to come up with any independent monetary policy actions. The easy monetary policy has been one of the key reasons that we have seen such a strong performance in equity markets and also in the housing markets. If you look at the left hand slide, then you see that the Danish equity market, the OMX C25 index has actually increased by almost 50% since the beginning of 2020. This includes the correction which we saw in February/March last year. So that's really significant. But also the Swedish and Finnish market is strongly up. If you look at the slide in the middle, you can see house prices. They have also soared in the Nordic countries over the past year on, and we expect double-digit increases in house prices both in Norway, Sweden and Denmark this year. Somewhat slower increases in Finland. But still, monetary policy has been decisive for the development in equity markets and in housing markets. So it makes it also a little complicated for central bankers to start tightening too much because you risk to see a sharp correction in these very important markets. And another fact is that by the easy monetary policy, the close to zero interest rates, it makes the increased public debt much more sustainable. There has been a sharp increase in public debt over the past year in the U.S. and the Euro area close to 20% points over the pandemic. And of course, it matters a lot for the sustainability if the central bank is holding these government bonds in the balances and they keep the interest rate as close to zero as possible. So monetary policy is right now also supporting the fiscal expansionary policy. In the Nordics welfare or wealth gains have been ample over the past year, both from financial markets and housing markets, and also real disposable income has actually been held up quite nicely by the compensation schemes from the governments. So the Nordic population as such is fairly rich these years, and we expect to see a solid increase in private consumption, maybe not least in services when the societies are being a reopened here over the summer, so a lot of pent up demand and services which will be released, and then much better conditions also for the export sector, not least when it comes to exports of services like tourism, are here with the gradual reopenings off the societies. So we expect that to be major drivers for the for the recovery. And then finally, just a few words about the situation in the FX markets. As we all know, the oil price matters a lot for the NOK and such. We can also see that commodity currencies have been performing the best this year. This right hand slide actually shows currency performance versus the dollar during 2021, and you can see that it's all so-called commodity currencies which have been performing the best, and this again just to indicate the shifts which you can see in also in FX markets, which can be be really strong. But our financial forecast as such can be seen in this table. Monetary policy rates. As you can see we expect the Fed to have hiked by 25 basis points till the end of 2022. No changes from the Euro area, Denmark or Sweden, but Norway up by quite a quite significantly to 125 by the end of 2022, and as mentioned earlier on, they will start hiking already this September Also government bond yields will start to increase, and we have a target of 2.5% for for the U.S. and somewhat lower increases in Europe. And then when it comes to the exchange rates, we do expect the dollar to regain strength because of the growth and interest rate differential to Europe. And we also see that both the SEK and the NOK will perform well versus the euro over the forecast horizon. By these words I will end my presentation and spent the last few minutes on questions and the answers. Thank you. I have one question here whether it's possible for India to achieve 11% growth in 2021 while the current Covid situation in India so serious. And I do admit and I have also mentioned that the bigger risks are still related, risks to our growth forecasts, are related to the pandemic, and it can be difficult in case that the situation continues in India. Hopefully they will also be able to get the incidence numbers down significantly over the coming months, but it is clearly a risk whether they can can obtain the 11% growth this year or it will only be next year that we will see somewhat even stronger growth in the Indian economy. There is a question to a crypto currency bubble similar to the dot com bubble in 2020 and I mean it's difficult for me to say whether it's a bubble, but I think personally that the increases you have seen, which are exponential in cryptocurrencies this year. They are clearly, to my mind, not sustainable. I mean, cryptocurrencies are not backed by central banks. They are, as I see it, primarily used for for speculative purposes, and the increases which we have seen are, to my mind, not sustainable. But that's only my view on that. I'm asked if I think the actual oil price is sustainable. Yes, I think it's fairly sustainable. Maybe in the future we should see a slight decrease in the price. But we are close to a historic average. There will be more demand now for oil when the transportation sectors are getting picked on track. So I do think that the levels, which we see around, say, $60-65 per barrel, can they be sustainable in the longer run? Probably not, but at least in the short term, I think it's not a completely unfair price. But of course there can be a situation where we will see more supply coming up also from the US oil producers in the world market. We have seen some increase in rig activity, but let's see what will happen. It's not completely unfair with a price around $60 per barrel to my mind. There's a question, and it's on the future development of the Chinese economy and well, I think that we should probably in the future, see some lower growth rates in the Chinese economy than what we have seen earlier on, not least for the reason that China is also facing an ageing economy, and it will be difficult for China to sustain growth rates of, say, just 7-8% just from technological progress year by year. So I think that growth in China is set for a diminishing path in the future until it starts to look more like growth rates, as we have seen or we know them from the experienced and advanced economies, and I think that I will just have one final question. It's related to commodity prices and again will they drop or remain on a similar level? And, as mentioned, for now I do see that there are some bottlenecks. There is still a lot of demand, so they maybe they can rise some further on. But a lot of this will probably also start to flatten out. The increases will flatten out maybe already later this year. Maybe in the beginning ofthe next year, as the world as such is is getting more normalised and we see that these bottleneck issues, they will start to disappear. And by these words, I will thank you very, very much for your attention. And I will also just mention for you that a brief survey will be launched in a few seconds on your screen, and we would highly appreciate if you could give us your feedback on this webinar presentation. Thanks a lot and hopefully see you again in September when our next economic outlook will be released. Have a nice day