EUR/SEK, EUR/CHF - Hawkish hold from Riksbank, very dovish hold from SNB
Slight pop for SEK after hawkish hold from Riksbank, EUR/SEK capped back from resistance
Very dovish hold from SNB, inflation subdued through to 2028 on unchanged rates
Latter keeps CHF as an increasingly extreme low yielder
Riksbank strikes a hawkish note with its expected hold today stating rather explicitly that “the policy rate should be raised more going forward than projected in the June forecast and that “it is expected that the increases to the policy rate will begin this year”. Stronger growth and ongoing supply shock noted. Couldn’t be more explicit than that.
SEK gets a bit of a pop on the headlines, up 20-40 pips, with EUR/SEK trying to roll back from the 11.30 tops from last July tested on the recent rally. 11.20-15 is initial pullback support.
SNB making the expected contrast, with its very dovish hold, “Medium-term inflationary pressure has increased only slightly. Monetary policy is appropriate to keep inflation within the range consistent with price stability and supports economic development”
In particular, the SNB’s benign inflation forecast (0.7-0.8% over full horizon to 2028) is “based on the assumption that the SNB policy rate is 0% over the entire forecast horizon.” Again, couldn’t be more explicit than that. CHF looks set to remain, by an ever increasing margin, the extreme low yielder among the majors, eclipsing the JPY.