**As seen in Risk In The Week report 09/08/23, subscribe at cablefxm.co.uk/reports
July headlines prices were unchanged from the prior as the figure increased by 9.3% Y/y, this was in line with the consensus. CPIF increased by 6.4% Y/y, the rate was unchanged from June but a bit slower than what economists had seen at 6.5%. The monthly figure posted its first decline since January at -0.2%. The price declines were seen in healthcare, clothing, and housing. Economists see Sweden's headline inflation at 8.4% Y/y in 2023, this is an upward revision to their 8.2% forecast, according to data compiled by Bloomberg. We remind you that the Swedish economy is overshooting its central bank price target the most in our G10 inflation monitor, the metric is 7.3 percentage points above the Riksbank’s goal. This raises the question if the central bank will pause as we have seen in recent decisions by the Fed, BoC, RBNZ, and RBA. The desk at Nordea is still penciling in two additional 25bps rate hikes this year, the move will take the repo rate to 4.25%. Nordea recently adjusted its peak policy rate forecast on currency weakness from the krona, their call contrasts to current swaps pricing of only 34bps of additional tightening from the Riksbank. A REER SEK index compiled by Citi is showing the rate close to record lows as the krona trades close to 12.0 vs the euro.
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