Sweden’s producer price index (month-on-month) rose to 2.4% in January. This was up from -1.1% in the previous period.
This means producer prices moved from falling month to month to rising. The latest figure shows prices were higher than the month before.
Producer Prices Reverse Higher
Sweden’s producer prices jumped in January. The index rose 2.4% month-on-month, after a -1.1% drop in the prior month. This is a clear turnaround and suggests price pressures may be building again. It also challenges the view that inflation was fading, so markets may need to rethink the Riksbank’s next steps.
After this data, the chance of a Riksbank rate cut in the first half of 2026 looks much lower. Officials may sound more hawkish, similar to early 2025 before the policy shift. Derivative markets that had priced in at least a 25 basis point cut by July may now move toward a “higher for longer” view on rates.
For rates traders, this points to higher short-term rates. Paying fixed on Swedish interest rate swaps (IRS), especially in the 2-year tenor, could benefit if the market continues to price out rate cuts. Swedish bonds sold off sharply in late 2024 when inflation surprised on the upside; something similar could happen again.
In FX, the Swedish Krona (SEK) may strengthen, especially versus the Euro. The European Central Bank is still pointing to a possible summer rate cut, which would widen the policy gap in Sweden’s favor. One way to express this is buying SEK call options against the EUR, looking for EUR/SEK to move back toward 11.15, where it traded in Q4 2025.
Higher inflation is also a risk for Swedish equities. If borrowing costs stay higher, company margins can come under pressure. The OMXS30 rose almost 4% in January 2026 on hopes of easier policy, and that rally could now be at risk. Buying put options on the index can work as a hedge, or as a way to position for a near-term pullback.
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