Growth and inflation data remain at odds in Sweden. Growth has been running at 4% annualized pace for the last two-quarters and the manufacturing PMI is the highest globally at a heady 65.2 (services at 61.3), yet the primary preoccupation of the Riksbank—inflation—has disappointed yet again.

The latest release on April 11th missed both consensus and Riksbank expectations resulting in SEK underperformance since then, but a few of the economists perceive that the miss will partly be reversed in April due to the pattern of airfares.

Riksbank will be the main event next week in which they should retain the easing bias given the miss in inflation which could be disappointing for SEK bulls.

In addition, an outcome for the French elections in line with our base case could result in modest EUR strength. To cushion against these moves we recommend raising the stop-out level on EURSEK by 0.55. Short NZDSEK through a put has underperformed substantially.

With a month left to expiry, we look for opportunities to unwind this trade.

Sold EURSEK at 9.4847 on January 13. Marked at -1.68%.

Long a NZD put/SEK call, strike 6.10, expiry May 23. Paid 1.47%, marked at 0.22%.