SEK gains after Swedish CPI report

Swedish CPI inflation report for May was released today at 7:00 am BST and turned out to be a hawkish surprise. Headline CPI inflation slowed much less than expected, while core CPI unexpectedly accelerated to 3.0% YoY. SEK moved sharply higher following the release with EURSEK dropping around 0.3%. However, big part of the move has been erased already.

Markets are pricing in more than a full rate cut from Riksbank by August. However, higher and persistent inflation may change Banks plans and they may communicate it on the June meeting.

Sweden, CPI inflation for May

• Headline (annual): 3.7% YoY vs 3.5% YoY expected (3.9% YoY previously)
• Headline (monthly): 0.2% MoM vs -0.1% MoM expected (0.3% MoM previously)
• Core (annual): 3.0% YoY vs 2.7% YoY expected (2.9% YoY previously)
• Core (monthly): 0.8% MoM vs 0.5% MoM expected (0.4% MoM previously)

Source: xStation5