Sweden Government Bond Yield Curve

FAQ

• What are the main drivers of the Sweden yield curve?

  
  Changes in the Sweden yield curve are influenced by a combination of domestic and external factors. Domestic drivers include the monetary policy decisions of the Sveriges Riksbank, inflation developments, and expectations for Sweden's economic growth. External influences include movements in global interest rates, conditions in European financial markets, and investor demand for Swedish government securities.

• What does the slope of the yield curve indicate in terms of market participants' economic expectations?

  
  From the perspective of market participants' expectations, each shape of the curve conveys a specific scenario:

  • A normal curve indicates expectations of steady economic growth and stable inflation. Investors demand a risk premium for holding long-term government bonds, as they are confident in the state's ability to service its debt in the future. This shape reflects a healthy economic trajectory without signs of an impending crisis.
  • An inverted curve signals high risks of recession in the near future. Market participants price in expectations of a key rate cut by the regulator in response to slowing business activity. Investors' willingness to lock in yields on the long end below current short-term rates indicates pessimism regarding short-term prospects and a desire to secure income before the start of a monetary easing cycle.
  • A flat curve reflects uncertainty and a transitional phase in the economic cycle: the difference between short-term and long-term rates is minimal, indicating that the market lacks clear benchmarks; monetary policy is perceived as restrictive, but its impact on growth and inflation has not yet fully manifested. This configuration often precedes a trend reversal—either toward growth or decline.
  • A humped curve points to complex, heterogeneous expectations: the market prices in a temporary rise in rates or their retention at high levels in the medium term (due to inflationary shocks or fiscal risks), but believes in normalization over the long horizon, implying expectations of policy tightening in the coming years followed by a return to low rates as the economy stabilizes.

• Which maturity combinations on the curve should be relied upon when assessing Sweden's economic outlook?

  
  The choice of tenor combination depends on the forecasting objective: if the goal is inflation, the forecast horizon should match the difference in maturities (a classic example: the 5Y–1Y spread for a five-year horizon). If the goal is to assess future economic activity, it is more effective to use the widest spread available in the given curve, i.e., to evaluate the difference between the maximum and minimum tenors. The standard combination in this case is the 10Y–2Y spread. High correlation between various wide spreads allows using any of them without loss of forecast quality.

• How should the short and long ends of the curve be interpreted within its available tenor structure?

  
  The curve structure covers a limited range from 1 month to 20 years, including only 9 key points.
  - Short end (1 month – 1 year): yields are determined primarily by banking sector liquidity and the central bank's monetary policy. The presence of frequent intermediate points ensures high sensitivity of this segment to the regulator's operational decisions.
  - The 2-year – 20-year segment reflects both medium-term economic expectations and deep structural trends within the Swedish economy.

• When are the new values of the Swedish yield curve published?

  
  The curve values are published daily on business days for the previous trading day. For example, data for 05/06/2026 is published on 05/07/2026.