**As seen in Risk In The Week report 06/22/24, subscribe at cablefxm.co.uk/reports
The Swedish central bank trimmed its policy rate by 25bps in
May to 3.75%, this was in line with economists’ estimates.
The Riksbank signaled that it will be expected to reduce its
repo rate further two times during the second half of the year.
More recently, the central bank deputy governor Jansson
said that the outlook for inflation remains bright and that a
June rate cut was not likely but could not be excluded either.
The latest inflation print showed Swedish CPIF 30bps above
the Riksbank’s 2% price target, a massive decline from
double-digit readings seen about 6 months ago. Q1 growth
came in at 0.7% while the central bank sees a modest 0.3%
rise in 2024.
Analysts at Danske Bank expect rates to stay steady this
week and will instead focus on an updated inflation outlook
and rate projections. Danske Bank did not call for a large
revision in the Riskbank’s forecast, they noted that CPIF is
currently in line with the central bank’s expectations. Danske
repeats their call for a 25bps rate cut in September which
they see being followed by a rate cut per quarter as they
expect the terminal rate at 2.25% by the end of 2025.
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