Sweden: December 2025: On hold at 1.75% as expected – Baby steps with the rate path

Danske Research Team Danske Bank A/S

Overview. The Riksbank kept the policy rate unchanged at 1.75% as widely expected and the near-term rate path was unchanged as well (also expected). Towards the end of the path, there was a small upward adjustment with a new end-point in Q4 28 at 2.12%. This was less than we expected but indicates baby steps towards normalisation. Notably, the forecast for the real policy rate path is downward sloping for the forecast period, which to us indicates a rather soft stance from the Riksbank. We maintain our view that the Riksbank will hike in December 2026, followed by March 2027 to 2.25%.

Macro. The macro forecast was revised in favour of a brighter economic outlook, as expected. Domestic demand drives the recovery, and household consumption is expected to grow in step with the growth in real incomes. The labour market is strengthening, and inflation, adjusted for tax changes is expected to be close to 2% next year. Overall, the Riksbank's new forecast is close to our forecast from 3 December. The largest deviation is in the unemployment rate, where we expect the LFS unemployment rate to fall more than the Riksbank does. The reason behind this is mainly different assumptions regarding the labour force participation rate.

Fixed Income. While the rate path revision was smaller than we envisaged, the market reaction was relatively small. Notably the pricing for the May-26 and Jun-26 meetings has been reduced (which makes good sense in our view, as we argued in our preview). Further out on the FRA-curve, the SEK curve has (so far) moved in tandem with EUR and the market is still pricing almost 2x25bp hikes until the end of 2027.

With regard to the operational framework, no news was presented despite a box about Stibor and the transmission mechanism and a repetition of the message in the May Financial Stability Report* and Thedéen's speech in September**, saying the Riksbank is ".. monitoring developments closely and is considering a number of measures to encourage banks to be more active in their liquidity balancing, as the Riksbank announced earlier this year."

Download The Full Riksbank review

Author

Danske Research Team

Danske Bank A/S

Research is part of Danske Bank Markets and operate as Danske Bank's research department. The department monitors financial markets and economic trends of relevance to Danske Bank Markets and its clients.

EUR/USD flirts with daily highs, retargets 1.1900

EUR/USD regains upside traction, returning to the 1.1880 zone and refocusing its attention to the key 1.1900 barrier. The pair’s slight gains comes against the backdrop of a humble decline in the US Dollar as investors continue to assess the latest US CPI readings and the potential Fed’s rate path.

GBP/USD remains well bid around 1.3650

GBP/USD maintains its upside momentum in place, hovering around daily highs near 1.3650 and setting aside part of the recent three-day drop. Cable’s improved sentiment comes on the back of the Greenback’s irresolute price action, while recent hawkish comments from the BoE’s Pill also collaborate with the uptick.

Gold clings to gains just above $5,000/oz

Gold is reclaiming part of the ground lost on Wednesday’s marked decline, as bargain-hunters keep piling up and lifting prices past the key $5,000 per troy ounce. The precious metal’s move higher is also underpinned by the slight pullback in the US Dollar and declining US Treasury yields across the curve.

Crypto Today: Bitcoin, Ethereum, XRP in choppy price action, weighed down by falling institutional interest

Bitcoin's upside remains largely constrained amid weak technicals and declining institutional interest. Ethereum trades sideways above $1,900 support with the upside capped below $2,000 amid ETF outflows.

Week ahead – Data blitz, Fed Minutes and RBNZ decision in the spotlight

US GDP and PCE inflation are main highlights, plus the Fed minutes. UK and Japan have busy calendars too with focus on CPI. Flash PMIs for February will also be doing the rounds. RBNZ meets, is unlikely to follow RBA’s hawkish path.

Ripple Price Forecast: XRP potential bottom could be in sight

Ripple edges up above the intraday low of $1.35 at the time of writing on Friday amid mixed price actions across the crypto market. The remittance token failed to hold support at $1.40 the previous day, reflecting risk-off sentiment amid a decline in retail and institutional sentiment.