Talking Points:
- Economic Tendency Indicator decreases, yet remains strong
- Household interest and inflation expectations marginally increase
- USDSEK remains supported above ascending trendline
Sweden’s Economic Tendency Indicator reveals a decrease in consumer and business confidence, despite the index remaining nearly 5 points above its historical average. The report also reveals a marginal increase in consumer inflation and interest rate expectations.
Despite falling by 0.8 points this month, the overall indicator remains strong, as do 4 out of the 5 confidence indicators—consumer confidence being the exception. Positive gains were made in the building and engineering (+0.4) and retail trade (+0.5) indicators. However, advancements in these categories were more than offset this month by declines in the manufacturing (-0.5) private service sector (-0.8) and consumer (-1.0) groups.
More specifically, confidence in the manufacturing segment fell by 0.6 points from 107.4 to 106.8. While content with production plans and current stocks, industry participants were not satisfied with current orders.
Confidence also fell among consumers, with the index dropping from 98.4 to 97.4. The household view of personal finances and the Swedish economy was more pessimistic given a 12 month horizon. They also found it less favorable to make major purchases at the present time.
Inflation expectations 12 months ahead increased by 0.2% on average. Interest rate forecasts for one year out remain unchanged at 2.31% while estimates for 2 and 5 years out marginally increased by 0.5% and 0.16%.
USDSEK Daily Chart
Chart Created by Walker England Using MarketScope2.0
