FREIGHT: Illinois River lock reopening delayed: Corps
Feb-27 15:14
The US Army Corps of Engineers delayed the reopening of the Lockport Lock along the Illinois River b...
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SEK: Tariffs Key To EURSEK Outlook
Jan-28 15:13
- Zooming out, the greatest risk to SEK this year is likely Trump’s tariff approach. The imposition of tariffs on EU companies would likely weigh on European equities, which traditionally weakens SEK relative to G10 peers. Additionally, broader EU economic weakness on the back of the tariffs may reduce demand for Swedish exports.
- However, the ECB’s monetary policy response to US tariffs (assuming the negative growth channel dominates the inflation channel) is likely to be more dovish than the Riksbank’s. The Swedish policy rate is already approaching assumed neutral levels, underscored by the Riksbank’s more cautious stance. Meanwhile, the ECB could still cut by 75bps (following Thursday’s fully priced 25bp cut) before reaching assumed neutral levels of 2%. More on the ECB in our preview here.
- Finally, the impact of past Riksbank cuts is expected increase real GDP by 1.9% Y/Y in 2025 (BBG consensus), handily outperforming the Eurozone growth consensus of 1.0% Y/Y.
- It’s these M/T rate and growth differentials that could prove a key driver of the EURSEK vol curve which, alongside broader G10 FX vol, has shifted lower during the course of this month.
MNI: US CONF BOARD CONSUMER CONFIDENCE 104.1 IN JAN V DEC 98.7
Jan-28 15:12
- MNI: US CONF BOARD CONSUMER CONFIDENCE 104.1 IN JAN V DEC 98.7
SEK: Options markets Priced For Test of EURSEK Trendline Resistance
Jan-28 15:12
- Overnight EUR/SEK straddles price a 0.3% break-even thanks to the run higher in overnight vol into tomorrow’s Riksbank decision – a swing that brings trendline resistance drawn from the November 21st high into play at 11.4966. That said, the run-up in vols is more muted relative to the September, November and December ’24 decisions.
- Analysts tilt heavily towards a 25bp cut, although SEB estimates suggest only 20bps of cuts are priced into markets. The persistence of any intraday SEK reaction will hinge on the policy statement guidance and press conference. After adopting a more cautious tone in December, the Riksbank may provide sparse guidance alongside a January cut.
- On the other hand, suggestions that another cut is likely in H1 2025 would be unambiguously SEK-negative. Full preview here
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