The fact that the Swedish economy grew a touch in Q1 adds to signs that the country has enjoyed some economic benefit from its light-touch lockdown. However, exports probably won’t save the day again in Q2 and, in our view, all paths lead to a repo rate cut later this year to boost its recovery. Next week will be a busy one on the data front, with GDP data from Switzerland likely to show that the economy shrank by 2% q/q in Q1, and inflation there almost certain to have fallen further into negative territory in May.
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