Sweden: Higher inflation reduces the likelihood for a rate cut – Nordea

Sweden released this morning the Consumer Price Index (CPI) data which came higher than expectations. EUR/SEK is losing some ground after the announcement, down -0.3% on a day to 10.40. These figures reduce the odds of a further rate cut, according to economists at Nordea.

Key quotes

“Inflation continues to be volatile. CPIF inflation came out at 0.7% YoY in June, higher than we, and the Riksbank, had expected.”

“Underlying inflation increased somewhat in June compared to May, with CPIF ex energy rising to 1.3% YoY, 0.2% points higher than we had expected.”

“Today’s numbers are a small windfall for the Riksbank, but inflation is not a focal point for the bank right now. If anything, this reduces the likelihood for a rate cut even further.”