Swedish March CPIF ex-energy was below consensus at 2.9% Y/Y (vs 3.2% cons, 3.5% prior). The Riksbank had forecasted 3.3% Y/Y in the March MPR.
Inflation was flat M/M NSA (vs 0.3% cons, 0.6% prior). This will likely provide the Riksbank with sufficient confidence that policy rates can be cut in May, before the Fed and ECB. The SEK weakened post-release, but EURSEK and NOKSEK remain below yesterday’s highs. The SEK moves were limited as a May cut was already more than 50% priced by markets ahead of the data. An unexpected weakening of the SEK between now and the May 8 meeting could still prompt some caution amongst the Executive Board, but conditions for rate cuts appear to have been met from a domestic standpoint. MNI’s seasonal adjustment shows CPIF ex-energy -0.1% M/M (vs 0.1% prior), while inflation momentum moderated across 1/3/6-month horizons. Component-level data shows the food and non-alcoholic beverages component falling 0.7% M/M and Y/Y NSA. There were also moderations in the annual rate of several goods (clothing/footwear, furniture and household equipment) and services (recreation and culture, restaurants and hotels) components. This suggests March’s disinflation was broad-based.