Summary:

  • Political chaos in Sweden gathers momentum
  • PM Stefan Lofven reshuffles his government
  • SEK might come under pressure in the aftermath

Sweden, being the largest Scandinavian economy, was hit by a political crisis which threatened to topple the Social Democrat-led government. However, a political tailspin seems to be coming to an end following PM’s press conference.

The case concerns three ministers in the Lofven’s Cabinet who were targeted for their botched response to a security breach that could have resulted in classified information getting into the hands of foreign powers. It’s worth adding that elections in Sweden are not due for another year.

As a result of a political disruption, Swedish PM decided to hold a press conference earlier today. He chose to reshuffle his government in response to demands from the opposition that no-confidence votes are cast against three of his ministers who may have put classified information into the hands of foreign powers.

PM decided to get rid of Home Affairs minister Anders Ygeman and Infrastructure minister Anna Johansson (both were undergone no-confidence motions) who are to be replaced with Tomas Eneroth (a new Infrastructure minister) and Morgan Johansson who is going to take over Ygman’s duties. Moreover, Helene Fritzon was named a new migration minister. The Cabinet’s reshuffling afflicted Gabriel Wikstrom as well, minister for health care, public health and sport who had been asked to step down. A third suspect minister, Peter Hultqvist, will remain in his position as the specific motion against him was not serious.

Swedish PM also defied speculation he would resign and instead replaced several ministers in his Cabinet amid a political crisis triggered by a government agency’s failure to protect classified data.

link do file download linkSwedish soft indicators have decoupled of late, hold onto their relatively high levels though. Source: Bloomberg

There were a few macroeconomic releases from the Swedish economy earlier in the day. The consumer confidence gauge ticked down from 102.5 to 102.2, whereas the manufacturing confidence measure picked up from 119.9 to 120.3. Moreover, the jobless rate rose from 7.2% to 7.4%, which is less than expected 7.5%.

link do file download linkThe EURSEK is rebounding from a support placed at 9.5560, hence a political crisis could prompt traders to cash in on recent shorts on the pair. Source: xStation5