Sweden’s PMI Index a Mixed Bag at 55.4, USDSEK Breaks Resistance

Talking Points:

• Sweden’s net trade balance fell to -0.7 billion krona in November
• December’s manufacturing PMI increases to 55.4 while its services PMI decreases to 55.4
• USDSEK: resistance becomes support in uptrend

Sweden’s net trade balance fell to -0.7 billion krona in November. The value of exported goods was SEK 94.9 billion while that of imports was higher at SEK 95.6 billion. The trade deficit within the EU (SEK -11.2 billion) outweighed the trade surplus with countries outside the EU (SEK +10.5 billion). When compared to the same month in 2013, the percentage of exports remained unchanged while imports increased by 5%. This imbalance explains why a trade surplus (+3.8 billion) was recorded in November of 2013 and a deficit in November of 2014.

December’s net trade balance remains unclear as the months manufacturing and services PMI produced mixed results. The purchasing manager’s index for manufacturing increased to 55.4 in December, up from 52.7 in November. When analyzed on a quarterly basis PMI rose to 53.4 in Q4, up from 53.1 in Q3. The index for new orders increased by 3.1 points while that of production increased by 2.6 points. Furthermore, the employment index rose to 53.7, partially offsetting the slight drop in the price of intermediate goods which resulted from a decline in oil prices.

In contrast the, purchasing manager’s index for the service sector declined falling to 55.4 in December from 56.8 in November. The reason for the decline: a slow-down in the growth of new orders which fell to 53.3. However, despite the sub-index’s decline, it has remained in the growth zone for 18 months. Furthermore the composite services PMI, was classified as stable last year as indicated by a 3-month moving average which placed the index around 56.

USD/SEK 4 Hour Chart

Chart Created by Walker England Using MarketScope2.0