Soft April CPIF Not Enough To Alter Riksbank Guidance

Swedish April CPIF ex-energy printed 2.9% Y/Y at (vs 3.0% cons, 2.9% prior). The Riksbank had projected a reading of 3.3% Y/Y in the March MPR, meaning the rounded forecast error of those projections remains steady at -0.4pp.

• MNI’s estimate of seasonally CPIF ex-energy printed 2.9% Y/Y at (vs 3.0% cons, 2.9% prior). The Riksbank had projected a reading of 3.3% Y/Y in the March MPR, meaning the rounded forecast error of those projections remains steady at -0.4ppadjusted inflation indicates that CPIF ex-energy rose 0.24% M/M in April, while inflation momentum at different time horizons increased slightly.
• Headline CPIF was also below consensus at 2.3% Y/Y (vs 2.4% cons, 2.2% prior and 2.7% Riksbank).
• We still don’t think this changes the picture much re: a possible June cut, given we will receive another inflation reading before the June meeting and the Riksbank’s guidance suggests the bar to cut in consecutive meetings is already quite high.
• SEK is biased a touch weaker following the release, but moves have been very modest.
• Looking at the sub-categories, the housing, electricity, gas and other fuels category moderated to 8.6% Y/Y (vs 9.3% prior), with a moderate increase in rents not enough to offset the M/M deflation in electricity prices. These dynamics were as expected.
• Core categories also appear mixed: Restaurant and hotel inflation rose to 5.6% Y/Y (vs 4.0% prior), with health and communications also seeing higher Y/Y readings vs March. On the other hand, recreation and culture continued moderating to 2.4% Y/Y (vs 3.1% prior).
• Clothing and footwear moderated in April, while furnishings and household equipment was -0.2% Y/Y (vs -0.7% prior).