SEK Underperforms As Riksbank Cuts

Fairly contained reaction from EURSEK as the Riksbank cuts its policy rates in line with expectations.

• EURSEK is currently just off intraday highs at 11.7298 (+0.4% today), while the SEK unsurprisingly underperforms the G10 overall.
• The decision contains few surprises. Guidance that the policy rate is expected to be cut two more times in H2 this year essentially rules out a June cut (which we had expected to be the case in our preview).
• Of the analyst previews we had read coming into the release, most look for between 3 and 4 total cuts through 2024 including the May meeting (i.e. broadly consistent with the Riksbank’s guidance from today).
• The balance of risks is very similar to the March meeting, with the weak krona, the strong US economy and geopolitical tensions once again highlighted.
• The policy decision does not appear to indicate any reservations amongst the Executive Board I.e. The decision seems to be unanimous.