At Any Rate Global Rates: Scandi Rates Outlook
Sep 4, 2025
Dive into the intriguing world of Scandinavian rates as the hosts discuss the current state of NIBOR rates and expected changes from Norges Bank and Riksbank. They analyze the delicate balance of the STIBOR-URIBOR spread, highlighting the economic factors at play. The narrowing Sweden 10-year benchmark spread takes center stage, driven by government fiscal strategies and global dynamics. Join in as they assess Norway's economic landscape and the potential repercussions of inflation on labor markets and domestic demand.
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Global Slowdown Raises Recession Risk
- Global industry is stalling as trade war tariffs weigh on goods demand and growth risks rise.
- JPMorgan's economists assign ~40% risk of a US recession in the next 3–6 months and expect the Fed to resume easing in September.
Norges Bank Cuts Priced Later Than JPMorgan
- Norway's economy remains strong, which has pushed short-term NIBOR pricing higher despite expected cuts.
- Markets price ~80bp of cuts to a 3.5% terminal rate but later than JP Morgan's Q1 2026 call, so the profile timing differs.
Use Front-End Spreads To Express NIBOR Bearishness
- Consider positioning in front-end NIBOR-euro spreads to be bearish on NIBOR versus euro given policy risk.
- The spread looks tight and fundamentals risk NIBOR underperformance, so use short-end money markets or swaps to express the view.