Tuesday, October 28, 2014

Sweden’s Riksbank step up its fight against deflation

•     Sweden’s Riksbank step up its fight against deflation

•      Sweden’s economy hasn’t improved since their last rate cut in early July.
•      Inflation rate has been falling for months; recently it fell dipper into deflation at -0.4% yoy.
•      The market consensus is for 15 bps rate cut at today’s meeting. I believe that it may not be enough for the inflation to revive. Thus, I expect that the Riksbank could cut interest rates down to zero and revise down the repo rate path, pushing expectations of a rate hike back even further.
•      Given the rate cut, and most likely a dovish statement and press conference by Gov. Stefan Ingves could keep SEK under selling pressure.

•      Durable goods orders for September

•      The headline figure is forecast to show a 0.5% mom rise, a rebound from -18.4% mom in the previous month. Market pays more attention to durable goods excluding transportation equipment, which are estimated to rise at a slower pace. A better than expected figure could prove USD-positive.
•     Today:

•      Sweden: Retail sales for September are forecast to drop, trade deficit in September is anticipated to rebound and turn into surplus.
•      US: Conference Board consumer confidence for October, Richmond Fed manufacturing index for October and S&P/Case-Shiller house price index for August.

•      Speakers:  In addition to Riksbank Governor Stefan Ingves, Norges Bank Deputy Governor Jon Nicolaisen speaks. 

No comments:

Post a Comment