Sweden: Inflation to surprise to the upside for December - TDS

Analysts at TDS are looking for Swedish inflation to surprise to the upside for December, with the CPIF measure potentially returning to the Riksbank’s target of 2.0%.

Key Quotes

“The downside surprise to Norwegian inflation does not change our view, and our analysis shows that there’s very little correlation between the data surprises for Norway and Sweden.”

“If our forecast is correct, we could see an outsized market reaction, given the rarity of upside surprises recently, and since inflation would have returned target (even if only temporarily) well ahead of schedule, and for the first time since the Riksbank’s last hiking cycle.”

“FX Strategy—we remain committed to our sell-on-rallies posture in EURSEK.”