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Swedish inflation cools, cutting odds of a September Riksbank hike

Markets have largely erased the chance of a September move, with Danske expecting the first Riksbank hike in November and EUR/SEK facing downward pressure.

Reported · Written up by our desk · Major Pairs

Danske Research Team said softer-than-expected Swedish August inflation reduced market expectations for a September Riksbank rate hike. All three inflation measures cited, CPI, CPIF and CPIF-XE, came in below the bank’s forecasts, and the downside surprise was described as broad-based, according to FXStreet.

FXStreet reports that markets had priced about a 30% chance of a September move, but that probability has largely been removed. Danske now expects the first hike to arrive in November.

FXStreet also linked the shift in the rate outlook to currency moves, saying EUR/SEK is under upward pressure as the Riksbank path is pushed out. The note came alongside other FX commentary, including the US dollar under pressure as conditions favored the yen and gold holding above $4,400 on a softer dollar.

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