The coming week will be relatively busy for the SEK, with the Q1 GDP release (Friday), wage data (Friday) and the Economic Tendency Survey (Wednesday), likely confirming a solid picture for the Swedish economy. Despite recent Riksbank members’ attempts to talk the SEK down, EURSEK has drifted lower, close to levels that triggered the intra-meeting repo rate cut on 18 March. Consensus is looking for an increase in confidence indicators (98.5 from 97.1 in consumer confidence and 97.2 from 93.7 in manufacturing confidence) and a 0.4% q/q (2.7% wda y/y) increase in Q1 GDP, likely keeping downward pressure on EURSEK. Barclays notes:
- We expect further downside targets to be tested in the near term, given our expectations for a solid economic outlook.
- We expect EURSEK to stay range-bound in the near term as the Riksbank will likely respond to prolonged SEK appreciation with further easing.
- Further ahead we continue to expect SEK outperformance and continue to forecast EURSEK 8.90 by Q1 2016.
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