Sweden’s October CPIF inflation came in hotter than expected, reinforcing the Riksbank’s cautious stance on further rate cuts, ING’s FX analyst Francesco Pesole notes.
EUR/SEK reaction muted as markets adjust slowly
“In Sweden, CPIF inflation for October came in a bit hotter than expected at 3.1%, with core also slightly above consensus at 2.8%. This broadly endorses the Riksbank’s unchanged message yesterday: the bar for another cut is high.”
“The EUR/SEK reaction has been small as markets were pricing in little to no chance of more cuts ahead. Anyway, the data modestly reinforces our bearish EUR/SEK view. We are now targeting a return to 10.90 in the near term.”