MNI China Daily Summary: Monday, February 10

MNI BRIEF: PBOC'S Zou Promoted To Vice Governor Role

MNI BRIEF: China Steel To See Limited Impact From U.S. Tariffs

MNI: China CFETS Yuan Index Down 0.15% In Week of Feb 7

MNI: PBOC Net Drains CNY234 Bln via OMO Monday

MNI: PBOC Sets Yuan Parity Higher At 7.1707 Mon; -1.31% Y/Y

MNI: NORWAY JAN CORE CPI +0.1% M/M, +2.8% Y/Y

MNI: NORWAY JAN CPI +0.2% M/M, +2.3% Y/Y

MNI: US DEC CONSUMER CREDIT +$40.8B

GERMANY: Economy Ministry Lowers 2025 Growth Forecast As Expected

MNI EXCLUSIVE: EU-Mercosur Deal Close, But Likely Short-Lived - Officials

GERMANY: Kukies Considers Potential Non-Implementation Of 2024 Suppl' Budget

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SEK: Tariffs Key To EURSEK Outlook

SEK
USBulletSwedenMarketsForeign Exchange BulletsNorth America
  • Zooming out, the greatest risk to SEK this year is likely Trump’s tariff approach. The imposition of tariffs on EU companies would likely weigh on European equities, which traditionally weakens SEK relative to G10 peers. Additionally, broader EU economic weakness on the back of the tariffs may reduce demand for Swedish exports.
  • However, the ECB’s monetary policy response to US tariffs (assuming the negative growth channel dominates the inflation channel) is likely to be more dovish than the Riksbank’s. The Swedish policy rate is already approaching assumed neutral levels, underscored by the Riksbank’s more cautious stance. Meanwhile, the ECB could still cut by 75bps (following Thursday’s fully priced 25bp cut) before reaching assumed neutral levels of 2%. More on the ECB in our preview here.
  • Finally, the impact of past Riksbank cuts is expected increase real GDP by 1.9% Y/Y in 2025 (BBG consensus), handily outperforming the Eurozone growth consensus of 1.0% Y/Y.
  • It’s these M/T rate and growth differentials that could prove a key driver of the EURSEK vol curve which, alongside broader G10 FX vol, has shifted lower during the course of this month.
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  • Zooming out, the greatest risk to SEK this year is likely Trump’s tariff approach. The imposition of tariffs on EU companies would likely weigh on European equities, which traditionally weakens SEK relative to G10 peers. Additionally, broader EU economic weakness on the back of the tariffs may reduce demand for Swedish exports.
  • However, the ECB’s monetary policy response to US tariffs (assuming the negative growth channel dominates the inflation channel) is likely to be more dovish than the Riksbank’s. The Swedish policy rate is already approaching assumed neutral levels, underscored by the Riksbank’s more cautious stance. Meanwhile, the ECB could still cut by 75bps (following Thursday’s fully priced 25bp cut) before reaching assumed neutral levels of 2%. More on the ECB in our preview here.
  • Finally, the impact of past Riksbank cuts is expected increase real GDP by 1.9% Y/Y in 2025 (BBG consensus), handily outperforming the Eurozone growth consensus of 1.0% Y/Y.
  • It’s these M/T rate and growth differentials that could prove a key driver of the EURSEK vol curve which, alongside broader G10 FX vol, has shifted lower during the course of this month.