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How to get a job at the SNB; declining mobility

Our CE Mobility Trackers for Sweden and Norway paint a downbeat picture for the consumer sector and mirror the clear downward trend seen in the euro-zone over H2 2021. So while we still expect the Norges Bank to continue its tightening cycle on “Super Thursday” next week, policymakers have lots of cover to forego a rate hike for now if they felt so inclined. Elsewhere, the SNB is all but certain to leave its policy settings unchanged yet again next week, and our forecast that headline CPIF in Sweden will have been unchanged at 3.1% in November is below the consensus.
David Oxley Senior Europe Economist
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Nordic & Swiss Economics Weekly

Dumbo does monetary policy in Stockholm

The elephant-based metaphor used by Governor Ingves this week to describe how the ECB’s actions affect the Riksbank was particularly well judged given the increasing chance that Swedish and euro-zone policymakers will deliver mammoth 50bp rate hikes over the coming months. It will be another very quiet week on the data front next week. Riksbank Deputy Governor Anna Breman is due to participate in a panel discussion on the growing role of the financial sector in the climate transition on Tuesday but we would be surprised if she resisted using the platform to deliver a hawkish policy message.
ECB Drop-In (24th May 10:00 ET/15:00 BST): Could the ECB deliver a hawkish surprise? Join economists from our Europe and Markets teams for a discussion about what to expect from the Bank’s tightening cycle, including the chances for a bumper hike in July or even an early move at next month’s meeting. Register now.

20 May 2022

Nordic & Swiss Chart Book

Rising CPI expectations occupying minds at Riksbank

Just as policymakers at the ECB are becoming more concerned about inflation expectations, the rise in expectations in Sweden is giving the Riksbank plenty to fret about too. The Bank’s preferred measure – gleaned from a survey of money market participants over a five-year horizon – jumped from 2.2% in April to 2.4% in May. (For context, the previous series high was 2.3%, set in September 2009.)

13 May 2022

Nordic & Swiss Economics Weekly

NATO retaliation; Riksbank eyeing front-loading?

Even if reports that Russia is close to cutting off the supply of natural gas to Finland prove accurate, Finland seems well placed to replace Russian flows with LNG imports from elsewhere. So, while Finland’s economy will be hit harder than most other euro-zone economies from a broader loss of trade with Russia, the direct effect of a cessation in Russian gas supplies in retaliation for its NATO application would be small.

13 May 2022

More from David Oxley

Nordic & Swiss Central Bank Watch

Norges Bank to hike as planned, despite Omicron

Omicron means that a Norges Bank rate hike next Thursday is no longer as nailed on a prospect as it once was, but we still think that policymakers will decide to raise rates to +0.50%. Meanwhile, although the SNB has let the franc rise in recent weeks, it will reiterate its willingness to intervene “as necessary”.

9 December 2021

Nordic & Swiss Economics Weekly

SNB’s patience appears to be wearing thin

We argued this week that the upside for the Swiss franc was limited and its inability to push past the CHF 1.04 per euro mark suggests that policymakers’ patience may already have been exhausted. We await the publication of the weekly sight deposit by the SNB on Monday to confirm our suspicions that the Bank has seen enough. But if the SNB is to avoid adding substantially to its already-bloated balance sheet, it will be hoping – like the rest of us – that Omicron fears blow over soon. Next week, we expect data to show that mainland GDP in Norway rose by about 0.2% m/m in October and that core inflation remained well below target in November.

3 December 2021

Nordic & Swiss Economics Update

Pandemic-era lessons for the Swiss franc

Given the uncertainty around Omicron, and the revealed preference of the SNB in recent weeks to largely stay out of the FX market, we would not be surprised to see the Swiss franc rise further against the euro in the near term. But any upside is limited, and the balance of risks is tilted towards depreciation in 2022. In view of the wider interest, we are also sending this Nordic and Swiss Economics Update to clients of our FX Market Service.

1 December 2021
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