Swedish interest rates fell and the krona weakened on Tuesday after a new inflationsbesvikelse from statistics SWEDEN, which ended up in both of the market that the Riksbank adopted for september.
The Swedish two-year rate fell 3 basis points to 0.68% and a ten fell 7 basis points to 0.23 percent, compared with american trading on Monday.
the Crown dropped 10 penny against the euro at 9:75, to find the corresponding levels against the euro, you go back to the spring of 2010.
Against the dollar dropped the crown 15 the penny to 8:80.
the CPI rose 0.2 percent during the month, expected was +0.4%, according to SME Direkt survey. To that in the contributed to price increases on clothing by 0.2 percentage points, and restaurants and accommodation by 0.1 percentage point. It was offset mainly by lower prices of vegetables, telecommunications and transport services went down 0.1 percentage points each.
the CPI inflation thereby fell to 0.9 from 1.1 per cent. The CPIF-inflation (fixed interest rate) fell to 1.2 from 1.4 per cent.
the Outcome was below the lowest forecast for both CPI and CPIF in the SME Direkt survey, where the average low of 1.2 and 1.5% respectively.
It was while the 0.5 and 0.4 percentage points respectively below the Riksbank’s forecast from the monetary policy report in september.
CPIF inflation excluding energy, which has now dropped to 1.0 from 1.4 per cent, low, 0.5 percentage points below the Riksbank’s path.
In August, CPI inflation and CPIF inflation is 0.2 percentage points below the Riksbank’s forecast, while the CPIF excluding energy was 0.1 percentage point below.
the Riksbank expressed at the time of the latest monetary policy meeting, on september 6, a complete contentment with the developments so far in the year and the outlook for inflation were to continue toward the goal.
the Question is now, whether there will be reason to revise this. The next meeting will be held on 26 October, and before then, we also notice from the ECB, which has a bearing on the Swedish monetary policy, albeit waning, according to some members.
Deputy governor Henry Ohlsson told reporters on Tuesday that even if the outcome was lower than expected as they look more at the trend, and it is still good. He also noted that the long-term inflation expectations have risen.
Nordea wrote in a comment to the CPIF excluding energy was the lowest since april 2015, and that inflation has begun to show a very weak trend in recent months. They now see reasons to revise down its inflation forecast, which is already low in the Riksbank’s path.
It also means that they change their assumption about the Riksbank and think that in October will cut the policy rate by 10 basis points to -0,60% (previously unchanged), and expanded QE program of sek 30 billion (previously € 15 billion).
“The main reason for the extra stimulus, we believe that the Riksbank will signal that they will do what they can to get inflation up in preparation for the upcoming round of wage negotiations. The riksbank has been clear that it does not want to inflationstrenden to turn,” wrote Nordea.
Also Swedbank sees it as troubling for the Riksbank to domestic inflation fell to 1.77 per cent. This at the same time as the imported inflation fell to -0,65 per cent in annual terms.
“the Outcome will increase the pressure on the Riksbank to act early, but we still believe that they will be patient when the low price pressure can be partly explained by the warm weather and significant base effects,” writes Swedbank.
They are therefore stuck to its forecast that the Riksbank will wait in the near future, but come back in december with further QE (with de-escalation, “tapering”) and the first rate hike postponed to the first quarter of 2018.
SEB’s chief economist Robert Bergqvist also wrote on Twitter that there is no doubt that inflation will cause a headache for the Riksbank but asked also why they would lower the interest rate when the crown is in a weakening trend.
Other data on Tuesday showed a very weak clothing, and trafficking in september, while the labor market continued to show a good development according to the employment agency.
IN the united states, the economic confidence among small businesses in september compared with the previous month, according to an index from the NFIB, National Federation of Individual Business, on Tuesday.
the NFIB’s index was noted to 94,1 in september, down from the unaudited 94,4 previous month. According to Bloomberg News survey, counted the analyst with an index of 95,0.
John Ryding and Conrad DeQuadros at RDQ Economics wrote in a marknadsbrev that confidence among småbolagen continues to move sideways and optimism is low compared with previous economic expansions.
U.s. interest rates rose 4-5 basis points compared with the Swedish closure to 0,87% for the two-year interest rate and 1,77% for the ten-year. The dollar strengthened slightly against the yen on Tuesday and was trading at Swedish closing in the 103:79, against the euro traded at same time around 1:11.
the European interest rates fell overall on Tuesday, German interest rates fell 1 point. The two-year German interest rate was at the american closing in -0,67% and the ten-year interest rate of 0.04%.
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