EUR/SEK stays vigilant on CPI figures – Danske Bank

Chief Analyst at Danske Bank Jakob Christensen noted the Krona should be under pressure in light of the release of inflation figures in the Nordic economy later in the morning.

Key Quotes

“Swedish CPI today will be the key focus. A test of the lower end of the 9.50- 9.65 range is probably within reach now if inflation figures come out on the high side of consensus (as we look for)”.

“But, given that the krona (KIX) is already trading 2% stronger than the Riksbank forecast, the near-term downside potential in EUR/SEK is likely not that great before it starts to have a negative feedback on the Riksbank's policy stance; indeed Ingves and co are sidelined for now and still seem to i.) prefer to await the next ECB move and/or ii.) a sustained pick-up in inflation before changing direction on monetary policy”.

“Our base case is still that the Riksbank ends its QE programme in December, which may eventually prompt a steeper yield curve and stronger SEK, especially if the ECB continues with its buying next year”.