The external pressure on the Riksbank to lift rates is building, as the media coverage is highly critical of the Riksbank – and for the opposite reason compared to a few years ago, according to analysts at Nordea Markets.
Key Quotes
“The Riksbank will likely to seek to avoid a similar communication disaster as the one in April. As a result it will probably try to make the July decision a non-event. This is one reason why it is hard to believe in any major repricing of the SEK triggered by monetary policy at the next meeting.”
“On a somewhat related note, we have identified a secret driver of the Swedish krona – the World Cup. Recent price-action is reminiscent of what we experienced in the World Cup year of 1994, when the SEK between the start of the World Cup and until the Bronze game. Maybe the Riksbank will face intense criticism after all, maybe as a result of what may be World Cup-driven SEK weakness over the next few weeks.”
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