SEK flows: SEK upside potential after strong economic tendency survey

The Swedish confidence numbers this morning have all been on the strong side of expectations, and the Swedish economic tendency survey which shows a reasonable long term correlation with GDP has recovered to its highest levels since August 2022 and is back to similar levels to those seen before the pandemic. This provides a fairly solid indication that the recession is over, and should provide some support for the SEK. EUR/SEK has traded higher than suggested by yield spread correlations in the last few weeks, and should now have potential to move back towards the 11 area which looks more consistent with current spreads. While the Eurozone also looks to be showing an improved growth performance, the SEK will tend to do better in periods where Europe is recovering, acting as something of a super-EUR.