Analysts at Nordea Markets suggest that even the über-dovish Swedish Riksbank-stronghold is getting slightly soft at the knees.
Key Quotes
“Last week two out of six Riksbank members voted for a rate hike (this was widely expected, though), while the official communication continues to point to a rate hike in December (or February 2019).”
“The Riksbank will in all likelihood finally hike the policy rate in December. However, the big IF is for how long the window will be open for rate hikes. Our CPIF forecast suggests that the Swedish inflation momentum will abate very swiftly from mid-2019 and onwards. This should put a substantial lid on the Riksbank’s appetite to normalise further unless the ECB moves.”
“The Riksbank is not the major thing to watch for regarding the SEK trend. The broader USD cycle and the global risk picture are more important currently.”
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