Sweden’s industrial production value rose 5.1% month on month in December. This followed a -0.1% change in the previous month.
The December release shows a strong 5.1% month-on-month rise in industrial output. This is a clear rebound from November’s slight decline. We see this as a bullish signal for the Swedish economy that the market may not be fully reflecting yet. It could be a near-term catalyst for gains in Swedish assets.
This strength also suggests the Swedish Krona (SEK) may be undervalued, especially versus the euro. With the Riksbank focused on its 2% inflation target, stronger growth reduces the case for near-term rate cuts. We would consider buying SEK call options or selling EUR/SEK futures, looking for a move toward 11.10 (a level last seen in late 2025).
In equities, the data is supportive for the industrial-heavy OMXS30 index. Large components such as Atlas Copco and Volvo could see earnings expectations revised higher. We see value in OMXS30 call spreads, targeting a 3–5% rally before the end of Q1.
The report also affects rates. A stronger economy could push the Riksbank to sound more hawkish. Swedish 10-year government bond yields, recently steady around 2.5%, could move higher. Shorting Swedish bond futures could work either as a hedge or as a standalone trade.
A result this far above expectations can also lift volatility. Implied volatility on OMXS30 options has been near 15%, which now looks too low. To position for higher uncertainty, we can buy straddles on key industrial companies that are about to report earnings.
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