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11 Mar 2015
Critical inflation figures due in Sweden – Danske Bank
FXStreet (Edinburgh) - Senior Analyst at Danske Bank Pernille Nielsen assesses the upcoming inflation figures in the Swedish economy in light of next week’s Riksbank meeting.
Key Quotes
“We are up for a volatile session in the SEK today as both Prospera's wage and inflation survey and February inflation figures are due to be published”.
“Should both or either of these figures disappoint – there is a non-negligible chance of intermeeting policy action before the week has passed”.
“The RIBA contracts and OIS swaps only price in a very little chance of further cuts this year and indicate a 50% probability for 25bp rate hike by mid 2016”.
“We think that this pricing is somewhat stretched and from a interest rate perspective, risks are tilted to the upside in EUR/SEK today”.
“We target EUR/SEK at 9.30 in 1M. As time goes by the current weak SEK, a global recovery and a better than previously expected Swedish growth outlook support a rebound in the fundamentally undervalued SEK. We target EUR/SEK at 8.90 in 12M”.
Key Quotes
“We are up for a volatile session in the SEK today as both Prospera's wage and inflation survey and February inflation figures are due to be published”.
“Should both or either of these figures disappoint – there is a non-negligible chance of intermeeting policy action before the week has passed”.
“The RIBA contracts and OIS swaps only price in a very little chance of further cuts this year and indicate a 50% probability for 25bp rate hike by mid 2016”.
“We think that this pricing is somewhat stretched and from a interest rate perspective, risks are tilted to the upside in EUR/SEK today”.
“We target EUR/SEK at 9.30 in 1M. As time goes by the current weak SEK, a global recovery and a better than previously expected Swedish growth outlook support a rebound in the fundamentally undervalued SEK. We target EUR/SEK at 8.90 in 12M”.