Although all focus is on coronavirus developments these days, even the Riksbank’s it seems, there is reason to comment on the February inflation print for the economists at Danske Bank. EUR/SEK trades at 10.849.
Key quotes
“It was very close to our call, meaning CPIF turned out 0.5pp below Riksbank at 1.0% y/y.
“There is most likely a potentially significant downside risk to core inflation stemming from signals about plunging sales of airline tickets, charter packages, hotel bookings, restaurants and visits to social events such as movies, theatres, concerts, sports and training facilities which constitute about 15% of the CPI basket. Should this risk be realised, we can easily envisage CPIF getting close to zero this summer.”
“On the back of an increasing risk that Sweden enters a recession as well as a strong disinflationary period, we expect inflation expectations to fall further in coming months.”
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