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SWEDEN: Aug CPI Preview: Last Inflation Report Before Sep Riksbank Decision

SWEDEN
CEEMEABulletSwedenGlobalFixed Income BulletsForeign Exchange BulletsRegionMarkets

The main intrigue of today's Swedish August CPI report is whether it would tempt the Riksbank into considering a 50bp cut at the September 25 meeting. CPIF-ex energy is expected to remain steady at 2.2% Y/Y, which would be in line with the Riksbank’s June MPR projection.

  • We think a sub-2% core reading could be enough to sway some members of the Executive Board towards a 50bp cut (Anna Seim appeared somewhat open to the idea in an interview last weekend), but still wouldn’t be enough to generate an overall majority.
  • A more notable deterioration of activity data than has currently been observed is probably needed to increase the pace of the (already aggressive) cutting cycle.
  • Analysts generally expect regular seasonal patterns for several CPIF ex-energy categories on a monthly basis, with recreation/culture and food prices expected to fall, but clothing and footwear prices expected to rise.
  • Headline inflation is expected at 1.4% Y/Y, 3 tenths below the Riksbank’s June MPR forecast. A pullback in electricity prices is the primary driver for this development.
  • Click the image below for a selection of analyst views:
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The main intrigue of today's Swedish August CPI report is whether it would tempt the Riksbank into considering a 50bp cut at the September 25 meeting. CPIF-ex energy is expected to remain steady at 2.2% Y/Y, which would be in line with the Riksbank’s June MPR projection.

  • We think a sub-2% core reading could be enough to sway some members of the Executive Board towards a 50bp cut (Anna Seim appeared somewhat open to the idea in an interview last weekend), but still wouldn’t be enough to generate an overall majority.
  • A more notable deterioration of activity data than has currently been observed is probably needed to increase the pace of the (already aggressive) cutting cycle.
  • Analysts generally expect regular seasonal patterns for several CPIF ex-energy categories on a monthly basis, with recreation/culture and food prices expected to fall, but clothing and footwear prices expected to rise.
  • Headline inflation is expected at 1.4% Y/Y, 3 tenths below the Riksbank’s June MPR forecast. A pullback in electricity prices is the primary driver for this development.
  • Click the image below for a selection of analyst views:
content_image