Sweden: Focus on CPI inflation today - TDS
|Analysts at TD Securities suggest that Sweden’s July CPI seems to be set up for another month of CPIF ex-energy coming in below the Riksbank's forecast, but headline CPIF to come in above target.
Key Quotes
“We look for CPIF ex-energy to edge lower to 1.2% y/y in July, compared to the Riksbank's forecast of 1.44% in the July MPR. The Riksbank seems to have forecast a fairly sharp pick-up in the m/m trend for underlying inflation, which is unlikely to pan out in our view, raising the risk of yet another string of downside surprises.”
“For CPIF, we should see more support from energy prices, pushing the July print a tick higher to 2.2% y/y, in line with the Riksbank's forecast. As we've written previously, we think that inflation surprises are going to be the primary driver of the Riksbank's reaction function through the rest of the year.”
“So now we'll need to watch for further guidance from the Riksbank as to whether it reacts primarily to it's formal policy target, CPIF, likely sitting above 2% through the remainder of the year, or whether it's more concerned about another streak of downside misses to CPIF ex-energy.”
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.