Swedish Krona has traded sturdily during November and early- December, gaining against almost all G10 currencies.

Despite SEK strength, the Riksbank left rates unchanged at the December 15 meeting and also left its forward guidance unchanged, the profile implying a material risk of another cut in early-2016.

Governor Ingves also stressed out that -0.35% should not be seen as a floor for policy rates. Looking forward, we think the Riksbank will remain sensitive to exchange rate movements in early 2016.

In large part, this reflects the importance of the spring wage round, when around two thirds of the labour force will settle wage deals, many of them lasting for three years.

Low headline inflation readings through the negotiations would run the risk of employees locking into low wage growth for a prolonged period, making it more difficult for the Riksbank to hit its medium-term inflation target of 2%.

For this reason, and given the Riksbank's apparent preference for keeping EUR/SEK above 9.20, our bias is for a softer SEK into Q1.

We think, further gains from here will be more questionable, however, with EUR/SEK back in the 9.20-9.30 zone that the Riksbank has previously shown great discomfort with (not least with March's intra-meeting rate cut).