Sweden GDP growth less-than-expected

The SEK came under pressure last week following softer-than-expected Q1 growth of 2.5% wda y/y (consensus: 2.8% wda y/y). Despite the downside surprise, the data still portray a healthy growth profile, with the annual growth rate over the past year averaging 2.5%, of which more than 1.0pp is consumption-driven, says Barclays. 

A solid economic performance for the remainder of the year with robust growth leading to a modest rebound in inflation as a result. 

"With this is mind and given the recent rebound in EURSEK, there is limited scope for any intra-meeting easing announcement during the Riksbank's meeting of the executive board (Monday). Given the recent market reaction on such meetings, EURSEK is likely to come under some pressure should the Riksbank choose to make no policy changes", according to Barclays. 

The focus for the SEK will quickly turn to the May inflation report (11 June), following last week's rhetoric of additional action if inflation disappoints. Elsewhere, May PMI and April retail sales data are likely to suggest a somewhat softer growth momentum.

The market expects a virtually unchanged Manufacturing PMI print (Monday) of 55.3 but looks for a modest increase in Services PMI (Wednesday) to 56.0 from 53.9. On retail sales, expectations are for a 0.4% m/m (3.2% y/y) increase.