🇸🇪❗️Cable FX Macro Weekly Note: Sweden September Consumer Prices

**As seen in Risk In The Week report 10/06/23, subscribe at cablefxm.co.uk/reports

Sweden's CPIF metric slipped to 4.7%Y/y from the prior 6.4%, the median survey had seen prices rising by 4.9%. August CPIF-Ex energy printed at 7.5% Y/y, this was slower than expectations of 7.7%. While consumer prices eased more than expected, the inflation situation in Sweden has been one of the most challenging in the G10, domestic prices have overshot the central bank’s price target like nowhere in the developed countries. The Riksbank extended policy tightening in September while it introduced a hedging program in an attempt to stabilize USD/SEK and EUR/SEK. The krona has been among the worst performers in major currencies, this has made the Riksbank’s price target more difficult to reach. For September, economists see further easing in inflation, the desk at Nordea noted a dramatic drop in electricity prices and said that this will likely take 2% points off the headline. Nordea added that energy prices normalization is the main reason why the Riksbank sees CPI slowing to 2.5% by December. Despite expectations of deflationary progress, Nordea expects another rate hike from the Riksbank in November, this will take the policy rate to 4.25%. The main reason behind this thinking is SEK's weakness, they noted that the exchange rate remains fragile.