After last week’s decision to drop the FX intervention mandate and stick with the rate path, this week’s inflation data could be interesting. Ingves has a speech scheduled as well.
That's from our traditional Sunday evening week ahead preview and the reference there was obviously to the Riksbank which last week decided to lean a bit hawkish despite the global pivot to dovish monetary policy in the face of mounting headwinds to growth.
Well, we got the inflation data on Tuesday and it was indeed "interesting", where that means CPIF missed the lowest estimate, printing just 2% YoY versus the Riksbank's 2.4% prediction. "Seasonal volatility" or no, that's a huge miss.
Not to put too fine a point on it, but that's exactly what we were trying to warn about last week when we gently suggested that now was not the time for Sweden to try and be a hero (so to speak) by sticking to the rate path in the face of clear risks to the outlook and the makings of a coordinated relent from the central bank's global counterparts.
Dear Sweden: ‘Slightly Hawkish’ Doesn’t Work Right Now
If the Riksbank (which hiked for the first time in seven years in December) thought they w
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