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Underperforms As Soft EZ HICP Reduces Riksbank Hike Needs

SEK

SEK underperforms the G10 this morning, with little in the way of domestic news flow to back the move. However, EURSEK and USDSEK still sit below the respective 20 to 200-day EMAs, after reaching multi-month lows yesterday.

  • The softening of EZ inflation has served to increase ECB rate cut bets. All else equal, this reduces the need for the Riksbank to hike at its February meeting, reducing scope for the rate-differential channel to support the SEK in 2024.
  • NOKSEK remains within its recent range with 0.9831 the main resistance (June 26 low).
  • This week's Riksbank-speak from Thedéen, Jansson and Flodén has not been of major note, with the November meeting minutes released on Dec 4 the main focus.
  • Non-manual workers' wages remained at elevated levels in September at 4.6%, but this was not a market mover. Tomorrow's manufacturing PMI will be compared to November's Economic Tendency Indicator, where manufacturing confidence was a relative bright spot amid a weak sectoral field.

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