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SWEDEN: Sep Flash Inflation Still Important With 50bp Cut In The Balance

SWEDEN
CEEMEABulletSwedenGlobalFixed Income BulletsForeign Exchange BulletsRegionMarkets

Swedish flash September inflation data is due tomorrow at 0700BST/0800CET. This is the only inflation report before the Riksbank’s November 7 decision, for which markets price around a 50% implied probability of a 50bp cut. As such, SEK markets may still be sensitive to the flash inflation release, even if the Executive Board’s concerns are more focused on the activity/labour market side at present.

  • The September meeting minutes confirmed CPIF ex-energy as the Executive Board’s preferred inflation metric, given the impact of volatile energy prices on headline CPIF.
  • Analysts expect CPIF-ex energy at 1.9% Y/Y (Riksbank Sep MPR: 1.85%), which would be the first time below 2% since December 2021.
  • NOKSEK has staged an impressive 2% recovery from the Sep 27 lows, and a lower-than-expected inflation reading may support a climb toward 0.9842 (the August 16 high).
  • However, the cross will also be sensitive to Norwegian inflation on Thursday this week, as well as geopolitics-driven swings in oil prices.
  • Tomorrow's data will be the inaugural Swedish flash inflation release. Very few details will be provided (only monthly and annual CPIF/CPIF-ex-energy), with a full breakdown provided next Tuesday.
  • See below for a collection of analyst comments:
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Swedish flash September inflation data is due tomorrow at 0700BST/0800CET. This is the only inflation report before the Riksbank’s November 7 decision, for which markets price around a 50% implied probability of a 50bp cut. As such, SEK markets may still be sensitive to the flash inflation release, even if the Executive Board’s concerns are more focused on the activity/labour market side at present.

  • The September meeting minutes confirmed CPIF ex-energy as the Executive Board’s preferred inflation metric, given the impact of volatile energy prices on headline CPIF.
  • Analysts expect CPIF-ex energy at 1.9% Y/Y (Riksbank Sep MPR: 1.85%), which would be the first time below 2% since December 2021.
  • NOKSEK has staged an impressive 2% recovery from the Sep 27 lows, and a lower-than-expected inflation reading may support a climb toward 0.9842 (the August 16 high).
  • However, the cross will also be sensitive to Norwegian inflation on Thursday this week, as well as geopolitics-driven swings in oil prices.
  • Tomorrow's data will be the inaugural Swedish flash inflation release. Very few details will be provided (only monthly and annual CPIF/CPIF-ex-energy), with a full breakdown provided next Tuesday.
  • See below for a collection of analyst comments: