Swedish Krona: Growth strong, currency soft – Societe Generale
Societe Generale’s Kit Juckes argues that Sweden’s strong growth and low inflation contrast with broader G10 dynamics, yet the Krona remains weak. He notes Sweden’s superior debt sustainability and recent data showing robust Gross Domestic Product (GDP) and minimal inflation. Despite real effective depreciation over two decades, he expects economic outperformance versus the Eurozone to eventually draw capital inflows and influence Swedish Krona (SEK) and inflation.
Krona cheap versus Euro and Pound
"... Krona has fared over the last year – rallying until February 2026 and then falling (EUR/SEK rising) in the period since then."
"In real effective terms, the krona is 6% above its 2023 lows, but it has lost 18% in real terms over the last 20 years."
"This morning’s data – core CPI inflation at 0.4% y/y and monthly GDP up 3.9% y/y, are pretty striking – even if monthly GDP data should be treated with suspicion."
"If all we look at are the inflation numbers, and nominal GDP, then the Krona is likely to remain soft."
"But the country’s economic out-performance relative to the Eurozone will attract capital inflows and will eventually have an impact on inflation."
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
You may also like
Wall Street giants collectively raise rate hike forecasts, US Treasury futures continue to fall, gold drops over 1% to break 4000
After the US October CPI exceeded expectations, Goldman Sachs and Nomura added a forecast for an interest rate hike in March next year, while Deutsche Bank included a forecast for a rate hike in January next year. Currently, the market has fully priced in a 25 basis point rate hike in December, with a 13% probability for a 50 basis point hike. On Wednesday, the US Treasury spot market was closed, but Treasury futures continued to fall, with corresponding yields rising by about 2 to 4 basis points, and spot gold came under pressure, dropping by 1.1%.
No Need to Worry About the Cooling Down of AI Data Center Construction? The US Import Boom Is Unlikely to Subside in the Short Term, Real Impact May Come in 2029
It takes an average of 4.8 years from finalizing investment to starting construction of a data center project, and an additional 2.6 years from construction start to becoming operational. Servers usually cannot be installed until after the building structure and racks are completed. For trade partners such as Taiwan (China), South Korea, and Mexico who rely on US data center supply chain demand, the inertia in construction timelines provides at least a one- to two-year buffer for future exports.
Federal Reserve Major Debate: When Should the Tenure of “Number Three” Williams End?
The main point of contention is whether Williams should step down in June 2028, upon completing a full 10-year term, or in June 2027, when he reaches the mandatory retirement age of 65. Analysts point out that the Federal Reserve Board holds ultimate discretion; if he leaves early, Fed Chair Waller would be able to assert greater control over the appointment to this critical position. However, forcing Williams to shorten his term could easily be interpreted as political manipulation. Williams himself is expected to serve until June 2028.
Crypto prices
More
