Erik Thedéen: Vulnerabilities and resilience in a new world order

What the desk is arguing

The desk frames this as a critical juncture for the Swedish economy, where Thedéen's remarks underscore the importance of adapting to a new world order characterized by volatility and uncertainty. He argues that proactive measures are essential to safeguard economic stability, which could bolster the SEK's appeal as a safe haven currency.

Supporting this view, Thedéen pointed out that Sweden's robust economic fundamentals, including a strong fiscal position and low unemployment rates, position the country favorably compared to its peers. This is particularly relevant as the Riksbank continues to navigate inflationary pressures, which are projected to stabilize around 2% in the medium term.

Where it sits in our coverage

Our consensus target for the SEK against the EUR is set at 1.075, with a range from 1.04 to 1.12. Notable targets from other firms include: - jpmorgan: 1.10 (Mar26) - bofa: 1.04 (Mar26)

This view aligns with jpmorgan, which shares a similar outlook on the SEK's resilience, while bofa presents a more cautious stance at the lower end of the spectrum, indicating potential bearish sentiment that the desk does not endorse.

How other firms see it

Firms like jpmorgan and citi are aligned with our perspective, emphasizing the SEK's potential strength given Sweden's economic fundamentals and geopolitical positioning. Conversely, bofa and deutsche express skepticism, citing concerns over external shocks and domestic inflation that could undermine the SEK's performance.

Key indicators to watch include the EUR/SEK exchange rate, which is likely to reflect shifts in the Riksbank's monetary policy, as well as broader European economic data that could influence investor sentiment towards the region.

What the calendar says

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