SEK Outperforming G10; Improvement In Services PMI Will Not Change Riksbank Path

SEK sits toward the top of the G10, with a services PMI improvement alongside outperforming European equities likely providing support. USDSEK is 0.6% lower today, with the 20-day EMA at 10.2024 the first support. EURSEK sees a more muted move at -0.3%, as data-driven upticks in EGB yields supported the single currency this morning .

• The services PMI for December printed at a neutral 50.0 (vs an upwardly revised 48.5 prior), the first reading with a 50-handle since July 2023.
• The reading should not change much for the Riksbank at the February meeting, where rates are likely to be held steady at 4%. The main point of interest at the next meeting is whether (or more likely, by how much) the Riksbank will increase the pace of its QT programme.
• An uptick in services confidence was also seen in the December Economic Tendency Indicator (released on Dec 21), though this metric remained firmly in contractionary territory at 85.3 (vs 83.0 prior).
• While the prices paid component remains above 50, it softened to 57.9 in December (vs 59.0 prior). Employment was the only other sub-indicator to soften, printing at 51.1 (vs 52.3 prior).
• Both production and supplier delivery times printed above 50 in December, the former for the first time since May 2023.