US NATGAS: US Nat Gas Production Falls Amid Lower Permian Output: BNEF

Although basket re-weighting effects played a role in pushing Swedish January CPIF ex-energy above consensus and Riksbank forecasts, there was enough strength in underlying price pressures to support market pricing, which assigns a ~25% implied probability of a 25bp cut in March (according to latest estimates from SEB).

• On a seasonally adjusted basis using the X-13 methodology (and data going back to 1995), CPIF-ex energy prices rose 0.71% M/M, the highest reading since February 2023. Sequential strength was more pronounced in goods ex-food (0.98% M/M) than services (0.71% M/M).
• 3m/3m seasonally adjusted CPIF-ex energy inflation momentum rose to 3.11% (vs 2.50% prior).
• Meanwhile, the proportion of sub-components with annual inflation rates between 1-3% fell to 17% from 21% in December.
• Basket re-weighting effects pushed up the January CPIF ex-energy monthly reading by 0.21pp (above consensus estimates), while the annual rate is expected to be pushed up by 0.31pp on average across 2025.
• The Riksbank have been cognizant of increases in expected prices and PPI in recent months. The January CPI report may be an early indication of feedthrough into consumer prices.
• However, we don’t expect the Board to overreact to one month of data. In a recent speech, Deputy Governor Per Jansson said that “if confidence in the inflation target is high, it is also possible to allow slightly larger and slightly longer deviations from the target without monetary policy having to react fast and forcefully”. Inflation expectations data due tomorrow is expected to reaffirm medium-term confidence in the target. 

SGE (19th Dec) 42c, bought for 2.18 in 2k.

NIESR's Stephen Millard talks to MNI about R* and the BOE's new estimates of the neutral rate of interest. -On MNI Policy MainWire now, for more details please contact sales@marketnews.com