At Any Rate

European Rates: Scandinavian Rate Outlook – a Long Winter Hibernation

At Any Rate

•February 13, 2026•7 min

At Any Rate•Feb 13, 2026

Why It Matters

Understanding the Scandinavian rate outlook is crucial for investors seeking exposure to stable, low‑volatility European debt markets, especially as global rate cycles diverge. The episode’s timing is relevant because central banks in Sweden and Norway are signaling extended policy easing, which could shape portfolio strategies and risk assessments throughout 2026.

Key Takeaways

•Norway inflation surprise driven by rent weight, core above forecast
•Norges Bank likely holds rates, may lift path in March
•Front‑end Norwegian rates sold off 30 bps, pricing reflects hold
•Sweden core inflation at 1.7%, downside risks suggest Riksbank hold
•Swedish yield curve steepened then retraced; modest easing priced

Pulse Analysis

Norway’s latest CPI surprised to the upside, largely because rent now accounts for almost a third of the inflation basket. The broader price surge in insurance, hospitality, clothing and furniture pushed core inflation above the Norges Bank forecast, reinforcing expectations that policy will stay on hold through 2026. Analysts anticipate a modest path‑rate increase in March, with any rate cuts pushed back to September at the earliest. The front‑end market reacted sharply, selling off roughly 30 basis points and aligning pricing with a hold‑biased stance.

In contrast, Sweden faces downward inflation pressure, with January core CPI at 1.7% and momentum slipping to 0.5%, the lowest since mid‑2021. The Riksbank’s minutes revealed a dovish tilt, and a potential March cut is on the table if the basket effects and the April VAT reduction further depress prices. The Swedish yield curve has steepened to two‑year highs but has since retraced most of that move, leaving a visually steep but volatile profile. Market pricing now reflects modest easing, with about seven basis points of cuts expected by June.

Together, the divergent paths in Norway and Sweden shape the broader Scandinavian rate outlook. While Norway’s policy is likely to remain restrictive, Sweden’s downside risks keep the Riksbank on the sidelines, creating a modest bullish bias at the front end of the STIBOR‑Ytibor spread. Cross‑market dynamics suggest tighter spreads as euro‑area money markets stay range‑bound. Investors should monitor February CPI releases, the strength of the Norwegian krone, and Sweden’s budget announcements for any catalyst that could shift the steepness of the curve or alter the timing of rate adjustments.

Episode Description

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. Morgan. It is strictly prohibited to use or share without prior written consent from J.P. Morgan any research material received from J.P. Morgan or an authorized third-party (“J.P. Morgan Data”) in any third-party artificial intelligence (“AI”) systems or models when such J.P. Morgan Data is accessible by a third-party.

Show Notes

European Rates: Scandinavian rate outlook – a long winter hibernation | At Any Rate

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