Swedish data starts the week ahead of global PMIs on Friday

In focus today

Today in Sweden, the labour force survey (LFS) for January will be published. We expect seasonally adjusted unemployment to remain steady at 8.8% (Dec: 8.8%), which is in line with January data from the Swedish Public Employment Service. Looking ahead, we expect a marked labour market recovery during the spring.

Also in Sweden, the money market's inflation expectation survey (Origo Group) is released today. Short-term inflation expectations have slipped from around 2.0% to 1.5% because of the announced reduction in food VAT. However, longer-term expectations are well-anchored on target. Given this, it bolsters the Riksbank's strategy to look through 'temporarily' low inflation in the coming year.

For the rest of the week, focus on Tuesday will be the ZEW Survey in Germany, on Wednesday the minutes of the FOMC's January meeting and the monetary policy meeting in New Zealand, on Thursday the euro area consumer confidence, while flash PMIs for the US and the euro area round of the week on Friday.

Economic and market news

What happened overnight

In Japan, preliminary 2025Q4 GDP growth came in below expectations with an increase of 0.1% q/q (cons: 0.4%, prior: -0.7%). The downside surprise came from slower growth in capital expenditures which only increased 0.2% q/q (cons: 0.8%, prior: -0.3%). Private consumption increased at the slowest pace in a year by increasing 0.1% q/q (cons: 0.1%, prior: 0.4%). The data was thus clearly weaker than expected and especially the low domestic demand caused the Yen to weaken against the USD. After Takaichi's sweeping election win last week, the administration is expected to increase public spending to encourage private consumption and sustain economic growth in 2026.

What happened over the weekend

On Friday, US January CPI landed close to our expectations, as headline inflation slowed down to 2.4% y/y (Dec. 2.7%) and core inflation to 2.5% y/y (Dec. 2.6%). Energy contribution weighed on the headline figure despite the spike in natural gas prices, as US gasoline prices remained low through most of January. Negative base effects weighed also on the core inflation reading, even though the monthly pace accelerated slightly (+0.30% m/m SA, Dec. +0.23%). Looking ahead, slowing housing inflation and unit labour cost growth remain key disinflationary drivers for 2026. Read more about the latest global inflation developments from our Global Inflation Watch - Signs of cooling services inflation, 13 February

In the euro area, employment increased 0.2% q/q in 2025Q4 like in Q3, thereby showing that the labour market continues to be a hawkish factor for the ECB. While the aggregate euro area employment data is encouraging, we also see that the diverging trends between Southern Europe and Central Europe continued as employment in Spain increased 0.8% q/q, while employment in Germany declined 0.1% q/q. Continued employment growth in the euro area supports the ECB's current policy stance.

Over the weekend, the Munich Security Conference took place amid elevated tensions between the US and Europe. US Secretary of State Marco Rubio expressed commitment to the partnership between the US and Europe which gave some relief to European leaders; however, he maintained US demands for European countries to take greater responsibility for their security. In line hereof, Ursula von der Leyen called on the EU to take greater responsibility for its own security, arguing that strategic independence across defence, energy, trade and technology is no longer optional.

Also at the security conference and ahead of this week's peace talks between Ukraine, Russia and the US, Ukrainian president Zelenskyy called for a clear date for Ukraine's EU membership and urged the US to provide security guarantees for at least 20 years. EU leaders responded that they are not ready to set a membership date.

Equities remained largely unchanged on Friday, concluding a risk-off week driven not by macroeconomic developments but by concerns over AI disruption. What began in software this year, last week extended to various other sectors (logistics, transportation, wealth management...) as investors reassessed the disruptive potential of AI in high-margin service businesses. On Friday, however, investors cautiously returned to software. It wasn't a significant rebound, but the industry regained 2% during the US trading session, making it one of the best-performing sectors for the day. Despite the modest software recovery, Friday's session was largely defensive, with healthcare, real estate, and utilities among the top-performing sectors, while banks and big tech lagged. Small-cap stocks outperformed, with the Russell 2000 gaining 1.1% compared to an unchanged performance for the S&P 500 and Stoxx 600. Futures are slightly higher this morning.

FI and FX: EUR/USD ended Friday's session broadly unchanged as US CPI for January came in line with expectations while EUR/CHF hit the lowest level since January 2015 as risk-off sentiment lent support to the Franc. It was a busy week for Norwegian markets as NOK CPI on Tuesday was a game changer for short-end NOK rates as evident from price action with short-end rates completing a close to record intra-day rise. European yields ended the week on a weak footing with risk off sentiment dominating markets over the past week. As a result, 2Y EUR swap yields declined 5bp and 10Y EUR swap yields declined 10bp over the past week. In the US, yields declined across the curve during Friday's session. Oil prices fell on Friday, as news broke that OPEC+ looks to consider whether to hike production again in April.