Aila Mihr, Analyst at Danske Bank, noted the relevant releases in the Swedish calendar in the upcoming week.
“Next week in Sweden contains two key macro figures with a potential SEK impact: on Tuesday, labour market data and on Wednesday, NIER confidence data. Last month, both were on the strong side of expectations pushing EUR/SEK significantly lower, which illustrates that the SEK is not immune to real macro numbers, even strong ones – at least temporarily”.
“We have no reason to believe that the very strong trend in the labour market including employment growth will suddenly turn around. The NIER data is a more open story, but we have no strong ‘a priori’ take other than perhaps that NIER manufacturing will correct lower but then still be at very strong levels”.
“Finally, it is worth repeating that growth-related factors, including the Swedish surprise index, indicate that there is potential in the krona. We also note that this month we see divergence between European and US assets, where European equities have been outperforming”.
“Adding to this, the EUR/USD rise suggests a rebalancing need among Swedish investors that could generate USD/SEK buying and EUR/SEK selling”.