SEK: Strong labour data reduces cut risk – Danske Bank

Danske Research Team highlights a sharp downside surprise in Swedish unemployment, with the seasonally adjusted rate dropping to 8.0% versus 8.8% consensus. December and January figures imply sizeable positive revisions to labour metrics. The strong labour market is seen offsetting low inflation pressure and lowering the probability of a Riksbank rate cut in H1.

Robust jobs data supports Riksbank stance

"In Sweden, it was a big surprise as seasonally adjusted unemployment dropped to 8.0% (cons: 8.8%), while employment remained unchanged at high levels."

"Both the December and January reading suggest fairly big revisions to the better for both the unemployment rate and the employment rate."

"The strong labour market should balance out some of the pressure on the Riksbank from the low inflation readings and should decrease the probability of a rate cut in H1."

"Also in Sweden, inflation expectations decreased in February, particularly for the one-year horizon, which decreased to 1.4% from 1.5% in January."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)