EUR/SEK still seen within 9.45-9.65 range – Danske Bank

Chief Analyst at Danske Bank Jakob Christensen assessed the recent developments in the Riksbank.

Key Quotes

“EUR/SEK has dropped below 9.60 after the natural knee-jerk reaction to the decision to extend Stefan Ingves’ mandate. Before the decision, the monetary policy outlook was uncertain due to (i) data and (ii) the Riksbank’s future reaction function. Now at least we know the latter will be unchanged. Thus, data will be decisive and, as such, it is business as usual”.

“We thus deem that the spike in EUR/SEK was temporary and continue to see the pair within a 9.45 -9.65 range”.

“On the data front, we see a clear strong momentum in the Swedish economy as expressed by very upbeat NIER and Monday’s upbeat PMI manufacturing survey”.

“That said, we are a bit concerned about the housing market, not least its high importance for GDP, which is surely something to keep on the radar”.

“The September inflation data, due next week, will be close to the Riksbank ’s forecast and for the remainder of the year, our forecast is above the Riksbank, which favours near-term downside in EUR/SEK”.