EUR/SEK, NOK/SEK flows: CPI supports lack of broad inflation, Riksbank 'scope to wait'
Downside surprise on CPI breaks the recent pick up and supports Riskbank having scope to wait
EUR/SEK, NOK/SEK bounce albeit still with overhead resistance after o/b runs
Swedish CPI quite a bit below market expectations after some recent upsides, CPIF flash holding to 0.7%y/y vs market 1%, while ex energy dips to 0.5% from 0.6% vs market 0.8%. The Riksbank governor last week noted that while inflation had been higher than assumed in the summer, there was no evidence of clear broad upturn and the labor market still had slack. That still seemed to support the view, expressed by Deputy Per Jansson that the Riksbank had ‘scope to wait before adjusting monetary policy’ - today’s data going with the grain of a cautious pause at the next meeting (mkt still skewed to a hike).
EUR/SEK given a bit of a lift though still has last week’s highs of 11.16-185 above out to 11.2 which offers a stiffer cap into the recent stretched run. NOK/SEK also testing into last week’s highs, with oil supported (Brent pushing back towards $100 on the front month after the exchange of shipping strikes). 1.0350 is resistance ahead of a test of congestion around 1.0400.