Insights 
VT 
In the third quarter, Sweden’s economy exhibited a year-on-year growth rate of 2.4%. This performance aligns with what analysts had anticipated, pointing to stable economic conditions within Sweden.
Growth Across Various Sectors
The growth was supported by positive contributions across various sectors, reflecting resilience despite global economic challenges. Consistent growth suggests the potential for expansion in the coming quarters, with consumer confidence remaining robust and investment levels steady.
Market participants are expected to keep monitoring economic indicators to better understand Sweden’s future economic trajectory. The data suggests a stable and resilient economy, with favourable conditions for continued growth.
The third quarter GDP figure, being in line with expectations, has already been priced into the market, suggesting we should not expect a major immediate jolt. This stability points towards a potential decrease in implied volatility on Swedish assets in the coming weeks. We view this as a period to consider strategies that profit from lower volatility, such as selling short-dated options on the OMXS30 index.
This steady 2.4% growth, combined with recent data showing core inflation for October 2025 holding at 2.2%, gives the Riksbank little reason to alter its monetary policy. The central bank will likely maintain its current rate through the end of the year, removing the uncertainty of a surprise rate cut. We are therefore adjusting our interest rate swap positions to reflect a stable policy outlook into the first quarter of 2026.
Swedish Economy Outlook
Given the solid performance of the Swedish economy, especially when contrasted with recent reports of slowing industrial production in Germany, the Swedish Krona looks attractive. We anticipate the SEK will continue to strengthen against the Euro into the holiday season. Consequently, we are looking to build positions in EUR/SEK put options to capitalize on this trend.
The economic resilience shown in this report is fundamentally bullish for Swedish equities, particularly for export-oriented industrial and technology companies. We see this as confirmation to maintain a long bias on the OMXS30. We will use any minor market dips over the next few weeks to add to our long positions in index futures expiring in early 2026.
This environment reminds us of the post-financial crisis recovery period of 2010-2011, when predictable growth allowed for a steady, albeit slow, market appreciation. Back then, markets rewarded stability after a period of high uncertainty, a pattern we expect to see repeated now. This historical precedent supports a strategy of staying invested rather than trying to time a major breakout.
