SEK: Expected decline in Swedish CPI unlikely to weigh - ING

Analysts at ING point out that the key data point of the week for SEK is the Sweden Oct inflation (Tue) and they expect a correction lower as the energy-related base effects and erratic factors contribute to a decline in prices.

Key Quotes

“Although this may translate into a knee-jerk reaction in EUR/SEK higher, this should be limited and short-lived given that a decline in CPI is a consensus view.”

“With EUR/SEK trading somewhat rich vis-à-vis its short-term financial fair value, we see an upside to EUR/SEK as very limited, with valuation (both short- and medium-term) providing a cushion to SEK. The Sweden Oct unemployment rate (Thu) should have a non-negligible effect on SEK.”