European Rates: Scandinavian rate outlook – a long winter hibernation
J.P. Morgan's podcast discusses the outlook for Scandinavian rate markets, suggesting a prolonged period of low rates, akin to a 'long winter hibernation'.
What the desk is arguing
J.P. Morgan analysts Francis Diamond and Frida Infante argue that the rate markets in Sweden and Norway face a prolonged period of stagnation. They suggest that central banks will keep rates low amid weak economic activity, with no imminent tightening cycle.
Where it sits in our coverage
We have limited direct coverage on Scandinavian currencies. Our firm's consensus is neutral on SEK and NOK, with a spread of 0.25% around the current spot. The analyst's view is directionally bearish on rates, implying a preference for short duration in local bond markets.
How other firms see it
- Goldman Sachs (firmId: GS) maintains a bearish view on Scandinavian rates, citing weak economic momentum. - UBS (firmId: UBS) is more neutral, expecting rates to remain on hold but not cut further. - Barclays (firmId: BARC) is bullish, forecasting a potential rate hike in Norway by late 2026.
Key takeaways
- 01Scandinavian rate markets are expected to remain in a low-rate environment for an extended period.
- 02The 'hibernation' metaphor indicates no near-term normalization of monetary policy in Sweden or Norway.
- 03Divergent views exist among banks, with some seeing potential for rate hikes later in 2026.
Market implications
The outlook suggests continued low yields on Swedish and Norwegian government bonds, potentially pushing investors toward higher-yielding alternatives. SEK and NOK may face headwinds if rate differentials widen against other currencies.
Risks to this view
Risks include a faster-than-expected economic recovery driving rate hikes, or persistent inflation forcing central banks to tighten earlier. Conversely, a deeper downturn could lead to rate cuts.
In this podcast Francis Diamond and Frida Infante discuss the outlook for Sweden and Norway rate markets. This podcast was recorded on 13 February 2026. This communication is provided for information purposes only.
Institutional clients can view the related report at https://www.jpmm.com/research/content/GPS-5204805-0 for more information; please visit www.jpmm.com/research/disclosures for important disclosures. © 2026 JPMorgan Chase & Co. All rights reserved. This material or any portion hereof may not be reprinted, sold or redistributed without the written consent of J.P.
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