Since the Riksbank's last monetary policy meeting in December 2015, heightened market volatility and further declines in oil prices have led several G10 central banks to either ease policy (BoJ) or remain on the dovish side of market expectations (RBNZ, ECB, BoE). Market has also pushed back expectations for additional Fed rate hikes.

With heightened downside risks to inflation on renewed declines in energy prices, we could see downward revisions to near term inflation from the Riksbank. Yet, unlike several other DM economies, medium-term inflation expectations in Sweden remain stable and have been less reactive to recent oil price gyrations. Sweden's economic growth remains robust and there is less need for reactive Riksbank policies to persist in the coming months.

"We expect the Riksbank to ease policy further at its 11 February meeting, lowering its repo rate by 10bp to -0.45% (consensus: -10bp, market pricing: -7bp) given downside risks to inflation. As such, we see some further near-term upside risk to EURSEK but expect rallies to be short-lived and maintain our view of SEK outperformance versus the EUR over the next year." said Barclays in a research note.