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NOK, SEK Tremble Ahead of US-China Trade War News, EU Growth Data

NOK, SEK Tremble Ahead of US-China Trade War News, EU Growth Data

Dimitri Zabelin, Analyst
What's on this page


  • NOK watches GDP publication– SEK eyeing Riksbank, CPI reports
  • Nordics tremble before EU growth data – Italy and Germany in focus
  • Trade wars, Brexit remain headline risks as the global economy cools

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Last week – much like the start of this one – markets experienced a rude awakening by the news that US-China trade relations had severely deteriorated. In Norway, the Norges Bank announced its rate decision with an eye on another “likely” hike in June. The economic docket in Sweden remained light, so SEK currency crosses found themselves being primarily driven by global fundamental themes than by Sweden-based event risk.


The economic docket in Europe this week is peppered with crucial growth indicators out of the aggregate Eurozone as well as key individual member states. Namely, Germany, France and Italy – the three largest economies in the Euro Area. Here are a few potentially high-risk events to keep an eye on:

May 14, Tuesday – German ZEW Surveys, CPI.

May 15, Wednesday – Eurozone GDP. German GDP, France CPI. Italy Industrial Orders, Sales

May 17, Friday – Eurozone CPI

European economies have been broadly showing weakness despite the minor improvement last week that saw better-than-expected data and Italy’s ascension out of its shallow recession. However, the dominant downtrend and regional weakness still persists with looming political uncertainties accompanying the upcoming – and what some might call dreaded – European parliamentary elections.

While Germany struggles to avoid a recession, France is still contending with the Yellow Vest protestors as Emmanuel Macron attempts to appease them through bold – and potentially dangerous – fiscal measures. In a similar vein, the Italian government’s resolve on keeping its regulation-violating budget deficit is angering Brussels. This comes as Italy’s growth projection was revised for a third time down to 0.1 percent for 2019.

Krona and Krone traders will be closely watching the results of the data because of the implications European growth trends have on Nordic economies. This in large part has to do with the unique framework of EU-Nordic relations. Since the majority of Sweden’s and Norway’s exports head to Europe, reduced demand out of the Euro area could pressure the Scandinavian economies.

Chart Showing Global PMI


In the US, a slew of key indicators will be released which could induce short bursts of volatility. Here is some data to key an eye on:

May 15, Wednesday – Empire Manufacturing, Retail Sales, Industrial Production

May 16, Thursday – Housing Starts

May 17, Friday – U. of Mich. Sentiment (May P)

According to the Citi Economic Surprise Index, US data has been tending to underperform relative to economists’ expectations. This might explain why the Fed pivoted from its hawkish outlook at the end of 2018 to a more neutral tone. Housing starts in particular may warrant a close eye because of the potential inflationary boost it may provide to the US economy through increased consumption that often follows from purchasing a home.

US-China trade war risks will also likely continue to dominate headlines as it remains one of the biggest fundamental themes in global markets since 2018. The recent fallout in trade relations between Beijing and Washington revived market-wide risk aversion that has resulted in equity indices, crude oil prices and other sentiment-linked assets taking a hit. To learn more, be sure to tune into my weekly webinar where I outline political risks in the week ahead.


In Sweden, the economic docket for the week is primarily dominated by various CPI data releases. While the latest meeting minutes and commentary from the Riksbank revealed dovish undertones, weaker price growth may further add impetus to the notion of delaying the central bank’s intended rate hike. A more up-to-date outlook may be provided by various Riksbank officials who will be speaking throughout the week.

In Norway, local quarter-on-quarter GDP was recently released. Apart from that, the economic docket remains relatively light. This may leave NOK at the mercy of counter currency-based event risks and fundamental themes.

Want to stay up to date on Nordic price action? Be sure follow me on Twitter @ZabelinDimitri.


--- Written by Dimitri Zabelin, Jr Currency Analyst for

To contact Dimitri, use the comments section below or @ZabelinDimitri on Twitter

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.