VIEW: Nordea Remove Call For June Cut

Nordea have removed their call for a June cut.

• They now look for the next 25bp rate cut in August, followed by three additional rate cuts during 2024, leaving the policy rate at 2.75% come year end.
• They look for one further rate cut in early 2025
• Their previous forecasts included a rate cut in June, and a policy rate of 2.50% at year-end, which they also expected to prevail at the end of 2025.
• Nordea flag that that “the Riksbank has signalled that it is reluctant to cut rates in June. Moreover, recent developments, such as the ECB’s signals of gradual rate cuts and the strong labour market report from the US, make a move in June from the Riksbank less likely and thus warrants a change to our forecast.”
• Still, their “fundamental view on the economy remains intact.” They expect “inflation to be substantially lower than the Riksbank’s forecast.”
• They go on to state “moreover, the SEK has strengthened in recent weeks and is in line with the Riksbank’s assumptions. A rate cut in June can’t be ruled out completely, but on the back of the Riksbank’s hawkish bias and global developments, it is no longer our main scenario.”