Sweden’s industrial production value rose by 4.2% year on year in December. This matched the rate recorded in the previous month.
The unchanged figure indicates steady annual growth in the value of industrial output at the end of the year. No further breakdown was provided in the release.
Swedish Industrial Output Outlook
The steady 4.2% year-over-year industrial production figure from back in December 2025 sets a strong baseline for the Swedish economy. This robust data suggests underlying economic momentum is carrying over into the new year. For us, this reduces the probability that the Riksbank will consider cutting interest rates in the near term.
More recent data confirms this trend, with the Swedish manufacturing PMI for January 2026 rising to 53.5, indicating continued expansion. This sustained strength is a positive signal for industrial company earnings. We should therefore consider buying call options on the OMXS30 index, anticipating that the market has not fully priced in this resilience.
This economic picture should translate to a stronger Swedish Krona. The EUR/SEK currency pair has already fallen by over 1% since the start of the year, and this data supports further downside. We see opportunities in buying SEK call options against the Euro, targeting a move below the 11.20 level seen last autumn.
With inflation in January 2026 reported at 2.1%, slightly above the Riksbank’s target, pressure remains on the central bank to maintain its hawkish stance. Interest rate markets are now pricing in a greater than 50% chance of another rate hike by mid-year, a significant shift from just a month ago. We should look at forward rate agreements that bet on higher short-term rates through the second quarter.
Options Volatility Strategy
Given the upcoming Riksbank policy meeting next week, implied volatility on both the Krona and the OMXS30 has picked up. This makes selling out-of-the-money puts on Swedish industrial stocks an attractive strategy to collect premium. The solid economic foundation provides a buffer against significant market downturns, making this a calculated risk.
