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May CPI Preview: Eurovision and Taylor Swift Add Uncertainty To Services

SWEDEN
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Swedish May CPI is due tomorrow at 0700BST. Analysts currently expect CPIF ex-energy at 2.6% Y/Y (vs 2.9% prior). The Riksbank’s March MPR forecasted a 2.9% Y/Y reading, but this projection is now stale with March and April’s forecast error already -0.4pp.

  • Unless the data prints markedly below consensus, we don’t think it will have much of a bearing on the Riksbank’s June decision. Executive Board speakers (and the March MPR rate path) indicates that the bar to a second consecutive cut is very high. As such, we think any market reaction is likely to be relatively short-lived.
  • Analysts note that lower electricity prices should drag headline CPIF down towards the Riksbank’s 2% target, with analyst consensus at 2.1% Y/Y (vs 2.3% prior, 2.6% Riksbank MPR).
  • Services provide a source of uncertainty, particular in leisure-related categories. May saw Sweden host the Eurovision song contest and two Taylor Swift concerts, which may boost restaurant and hotel prices above their seasonal norms.
  • See below for a selection of analyst views ahead of the release:

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Swedish May CPI is due tomorrow at 0700BST. Analysts currently expect CPIF ex-energy at 2.6% Y/Y (vs 2.9% prior). The Riksbank’s March MPR forecasted a 2.9% Y/Y reading, but this projection is now stale with March and April’s forecast error already -0.4pp.

  • Unless the data prints markedly below consensus, we don’t think it will have much of a bearing on the Riksbank’s June decision. Executive Board speakers (and the March MPR rate path) indicates that the bar to a second consecutive cut is very high. As such, we think any market reaction is likely to be relatively short-lived.
  • Analysts note that lower electricity prices should drag headline CPIF down towards the Riksbank’s 2% target, with analyst consensus at 2.1% Y/Y (vs 2.3% prior, 2.6% Riksbank MPR).
  • Services provide a source of uncertainty, particular in leisure-related categories. May saw Sweden host the Eurovision song contest and two Taylor Swift concerts, which may boost restaurant and hotel prices above their seasonal norms.
  • See below for a selection of analyst views ahead of the release: