The Riksbank’s Financial Markets Survey: The functioning of the fixed-income and foreign exchange markets has deteriorated

News Market participants have a more pessimistic view now than they had in the spring with regard to functioning and liquidity on the Swedish foreign exchange market and fixed-income markets. This is shown in the Riksbank’s Financial Markets Survey of participants in the Swedish fixed-income and foreign-exchange markets, which was carried out in late September and early October.

The Swedish fixed-income and foreign exchange market participants are taking less risk than in the spring, partly due to increased volatility and poorer liquidity. The fixed-income market is functioning very poorly according to a majority of the participants, and many people highlight poor liquidity and the Riksbank's asset purchases as the main reasons for its poor functioning in general. The foreign exchange market for the Swedish krona is also functioning less well than in the spring.

Financial markets survey

Twice per year, the Riksbank sends out a Financial Markets Survey to participants active in the Swedish foreign exchange and fixed income markets. The purpose of the survey is to gain an overall picture of participants’ views on the Swedish financial markets – how they are working, what market activity looks like and the size of the risks they take. This report presents the results of the survey responded to in the period 21 September to 7 October 2022.

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Updated 01/11/2022