More bad Swedish data; Norges Bank to hold rates

The Norges Bank is likely to leave its key policy rate unchanged next Thursday but we expect it to leave the door open for a rate hike in September. More generally, though, the case for the Bank staying in tightening mode has clearly weakened and the risks to the krone are now on the downside. Meanwhile, if the CPI data from Sweden next Wednesday confirm that core inflation fell back in July, as we think likely, we’d expect the Swedish krona to weaken and to move closer to our end-year forecast of SEK 11 per euro.