SWEDEN: Largest Net International Investment Position Of All Time
The Swedish current account surplus rose to SEK111.9bln in Q4, up from SEK92.3bln in Q3 . On a 4Q rolling basis, the current account surplus was 7.4% of nominal GDP (vs 7.5% in Q3).
- The constituent components of the current account were largely stable. The goods surplus ticked down to 6.1% GDP (vs 6.2% in Q3), while the services deficit also fell slightly to 1.3% GDP (vs 1.5% in Q3).
- The primary income surplus rose a tenth to 4.4% (vs 4.3% prior), while the secondary income deficit deepened to 1.8% (vs 1.5% prior).
- The financial account registered a net lending balance of SEK347.8bln (vs SEK138.0bln in Q3). The 4Q rolling sum totalled 13.8% GDP, up from 9.7% in Q3 for a fresh all-time high. This reflected large increases in net direct investment outflows (1.5% GDP vs 0.1% in Q3) and net portfolio investment outflows (9.2% GDP vs 3.4% prior). Other investment outflows eased to 2.6% (vs 6.3% in Q3).
- The net international investment position increased to SEK4,253.8bln (vs SEK3,336,6bln in Q3), corresponding to 66% of nominal GDP. The SEK effective exchange rate weakened through 2024, which Statistics Sweden notes increased the value of foreign assets. SEK strength at the start of 2025 will thus have the opposite impact going forward.
- Danske Bank have highlighted that “the Swedish savings-investment balance continues to generate net equity outflows”, which are “fundamentally SEK negative”. However, they note that “the recent news on the consolidation of the AP funds might prompt SEK-positive reallocations flows in 2025”.
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STIR: 65bps of ECB Cuts Priced Through The Next Three Meetings
Euribor futures trade within yesterday’s ranges, with global markets displaying a relatively contained reaction to China’s tariff retaliation against the US overnight. Futures are -0.5 to -3.5 ticks through the blues.
- ECB-dated OIS continue to more than fully price a 25bp cut in March, with 20bps of sequential cuts priced through April and another 18bps through June.
- 87bps of easing are priced through year-end.
- Although flash January inflation was a little above consensus on the headline and core measures yesterday, underlying core and services inflation momentum continued to ease.
- Today’s regional calendar is light, with Banque de France Governor Villeroy scheduled to speak at 1330GMT/1430CET.
| Meeting Date | ESTR ECB-Dated OIS (%) | Difference Vs. Current Effective ESTR Rate (bp) |
| Mar-25 | 2.403 | -26.5 |
| Apr-25 | 2.205 | -46.3 |
| Jun-25 | 2.023 | -64.5 |
| Jul-25 | 1.947 | -72.1 |
| Sep-25 | 1.853 | -81.5 |
| Oct-25 | 1.831 | -83.7 |
| Dec-25 | 1.797 | -87.1 |
| Feb-26 | 1.795 | -87.3 |
| Source: MNI/Bloomberg. | ||
EQUITY TECHS: E-MINI S&P: (H5) Bearish Threat Still Present
- RES 4: 6178.75 High Dec 6 and key resistance
- RES 3: 6162.25 High Jan 24
- RES 2: 6147.75 High Jan 31
- RES 1: 6069.00 High Feb 3
- PRICE: 6017.50 @ 07:25 GMT Feb 4
- SUP 1: 5935.50 Low Feb 3
- SUP 2: 5892.37 76.4% retracement of the Aug 5 - Dec 6 bull leg
- SUP 3: 5842.50 Low Jan 14
- SUP 4: 5809.00 Low Jan 13 and a key resistance
The S&P E-Minis contract started the week on a bearish note. The gap lower Monday and a breach of support at 5948.00, the Jan 27 low, strengthens a bearish threat and cancels - for now - a recent bullish theme. An extension down would open 5892.37, a Fibonacci retracement point. Initial resistance is at 6069.00, today’s intraday high. Gains are considered corrective, however, a stronger rally would expose key resistance at 6178.75, the Dec 6 high.
USD: A volatile session for FX
- The Dollar is in the Green across the board, Tariff and deadline headlines dominate in Global markets going into the European session.
- The Kiwi was and still is the worst performer today, but the NZDUSD is some way short of 0.5516, Yesterday's low.
- This is a big support area level, since 0.5512 is the 2022 low and the lowest printed level since March 2020.
- The most traded Global pair is recovering some of its earlier losses, EURUSD is slowly edging back above 1.0300, after it exchanged hands at its worst level since November 2020 Yesterday at 1.0141.
- While it tested a 1.0350 overnight, the initial resistance will be eyed at 1.0387 20-day EMA.
