– RBNZ unchanged and less dovish than expected
– Singapore industrial production disappointed badly in September
– UK GDP likely up 0.5% in Q3
– We expect strong data from the US
What to watch for today
SEK: Vulnerable to further Riksbank easing. The continued deterioration in the Swedish PMI suggests risk of a further slowdown in Swedish activity, while inflation has continued to undershoot the central bank’s forecast. This weak growth/inflation mix argues in favor of further policy easing by the Riksbank, in our view. Hawkish comments by Governor Ingves last week have increased uncertainty about the decision. The rates market is only pricing in close to a 28% chance of a 25bp cut next week, which suggests scope for SEK to lose interest rate spread support on a rate cut or further dovish shift in the interest rate path. We recommend positioning for this via long GBPSEK. If the central bank decides to keep rates on hold, we think SEK could gain further ground versus EUR and NOK.
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Credit Suisse