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Prospera 1Y Inflation Expectations Fall Slightly

SWEDEN

Prospera's Inflation Expectations Survey for September showed 1Y expectations fall in all categories compared to the last quarterly report in June, while 2Y ahead inflation expectations ticked up a touch.

  • The quarterly report surveyed labour market parties and purchasing managers alongside the regular money market participants.
  • 1Y ahead CPIF inflation expectations for all interviewees fell to 3.6% (vs 4.0% in June), 2Y rose to 2.6% (vs 2.5% in June) and 5Y was steady at 2.1% as in June.
  • The largest changes compared to June were noted by purchasing managers, whose 1Y ahead expectations fell by 0.8pp between September and June.
  • Monet market participants expectations rose slightly compared to last month (1Y: 3.1% vs 2.9% prior, 2Y: 2.4% vs 2.3% prior, 5Y: 2.1% vs 2.2% prior)
  • Overall, the Riksbank will be encouraged by the step down in 1Y ahead expectations, but given the 1Y and 2Y-ahead prints remain above the 2% target (and especially with the latter print rising this quarter), it reinforces the case for a 25bps hike next week.

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