Riksbank to remain at 1.50% – small SEK positive
We expect Riksbank to remain on hold at 1.50% tomorrow. Our internal survey conducted yesterday only showed 18% of the respondents voting for a 25bps cut. The interest rate market however disagrees pricing a 65% probability for rates being lowered to 1.25%. From a resource utilization and inflation perspective the case is pretty clear: Swedish growth will remain below trend during the policy relevant horizon with higher unemployment and CPIF below the 2% target. This clearly calls for lower rates later this year. Tomorrow however we expect the central bank to maintain most of the projections made in February and to stay put awaiting further evidence on the Swedish growth slowdown and EMU developments. Page 8
Click here to read the full report: FX Ringside
SEB tech team