SEK keeps the negative prospect – Danske Bank

Stefan Mellin, Senior Analyst at Danske Bank, sees the Swedish Krona losing momentum in the next months.

Key Quotes

“Key macro pillars for our bearish SEK view are (1) the inflation outlook, which is on a downward slope and below the Riksbank’s estimate, and (2) growth momentum, which is deteriorating markedly in 2018 on the back of the slowdown in the housing market and weak private consumption”.

“Both these arguments suggest the Riksbank will not raise rates this year and not as quickly as the market is pricing and the Riksbank indicates for coming years. While we may feel somewhat less confident in our call, it is still our main scenario, so we make only minor changes to our forecast profile”.

“We set EUR/SEK at 9.90 (was 10.00) in 1M, 10.00 (was 10.10) in 3M, 9.90 (unchanged) in 6M and 9.80 (unchanged) in 12M”.