Less pressure on the Riksbank post ECB, but still a tough call

The outcome of last week's ECB meeting, combined with generally upbeat Swedish data have somewhat alleviated near-term pressure for the Riksbank. Yet, the KIX has recently strengthened and this week's inflation data (Thursday) will be of crucial importance. 

"We continue to forecast a 10bp Riksbank rate cut, but see an increased risk of no policy action", says Barclays.

CPIF inflation is expected to have increased by 0.1% m/m (1.2% y/y) relative to a consensus print of 0.0% m/m (1.1% y/y), which if confirmed should benefit the SEK and continue the recent inflation uptrend. Inflation expectations are likely to have been broadly stable as seen by the TNS Sifo Prospera report (Wednesday). Inflation developments this week in addition to the SEK's behaviour could play a crucial role ahead of the 15 December meeting.