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Riksbank minutes turn more hawkish after trade tensions flare

The Fed’s preferred PCE inflation reading is due later, with June PCE at 3.7% y/y and core PCE at 3.3%.

Reported · Written up by our desk · Central Banks

Sweden’s Riksbank minutes were more hawkish than the earlier policy update, with the board unanimous that the next step is a rate hike, even as the timing remains uncertain, according to Action Forex. The minutes noted that compared with the June meeting, members now see the economy and resource utilization approaching normal levels, while the current policy stance is viewed as somewhat expansionary.

The Riksbank also pointed to still-strong inflation momentum, with the central bank expecting inflation to be a key focus ahead of the September meeting, Action Forex added. Meanwhile, the market backdrop includes escalating US-Canada trade tensions, and the expectation for July PCE inflation data, the Fed’s preferred measure, released later in the session. In June, Action Forex cited PCE inflation at 3.7% year over year, and core PCE at 3.3%.

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