Swedish Krona: Inflation surprise shifts Riksbank outlook – Danske Bank
Danske Research Team reports that softer-than-expected Swedish August inflation reduced market pricing for a September Riksbank rate hike. CPI, CPIF and CPIF-XE all undershot the bank’s forecasts, with the downside surprise described as broad-based.
Swedish August inflation was softer than expected, altering the Riksbank's outlook on interest rate hikes, according to the Danske Research Team. CPI, CPIF, and CPIF-XE all fell short of the bank's projections, with the unexpected decline spanning various categories. The market's probability of a September rate increase by the Riksbank had been around 30%, but this figure has diminished since the release.
Danske now anticipates the first rate hike in November. Both goods and services underperformed, but food and energy prices were largely on track with expectations. The lower-than-anticipated inflation has given the EUR/SEK a boost, while the Norwegian Krone finds support in higher energy costs, presently trading below 10.80.
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