SEK flows: EUR/SEK more focused on geopolitics than Riksbank n/t
Minor reference to increased hike risks later in the year but forecasts underscore the 'well balanced policy on hold' view
EUR/SEK has been easing back in range, more focused on geopolitical/risk backdrop
Riksbank, at face value, gives a slightly more hawkish spin to steady-on-hold, saying the probability of a hike later in the year has increased. It’s average policy rate projection has been nudged up by 4-8bp across most of the projection, but still shy of 2% (1.93%) by Q2 2027. Forecasts have GDP at 2.2% (2.5%) and 2.3%(2.6%) for 2026 and 2027, and CPIF at 1.1%(1.5%) and 1.7%(1.3%) at fixed interest rate. So it’s clear that despite the slight increased spin on upside risks, the main view remains that policy is ‘well-balanced to leave unchanged’ amid low inflation and somewhat weaker than normal activity.
Negligible tick lower in EUR/SEK on the one headline, but largely unmoved – SEK more driven by the geopolitical and broader risk backdrop in recent sessions. On the latter basis, EUR/SEK may have some room for another swing back to the 10.80/75 range downside on the range that has been in play since March if sentiment on Iran and shipment flows remains more positive.