The road to diversity

Illiquidity has long plagued Sweden's inflation swaps market, but a decrease in activity from its primary supplier is prompting dealers to look for other sources. Gareth Gore reports

Sweden's central bankers might have been forgiven for raising a wry smile when economic figures for last year were released at the beginning of March. GDP growth came in well above the European Union average at 4.4%, government accounts are in surplus, and price rises seem to finally be under control after a turbulent few years.

But for all the back-patting at Stockholm's Finance Ministry, the figures ironically mark the beginning of a difficult period ahead for the city's inflation traders. With