Riksbank might rethink; Swedish gov’t on the brink

Against the backdrop of a red-hot housing market, the Riksbank might draw inspiration from the Swedish football team, which embodied one of the ideals of central banking in its opening Euro 2020 game by doing very little but still getting a result. We expect macroprudential policies to be tightened sooner rather than later, but it is not inconceivable that monetary policymakers follow Norway with a tightening cycle of their own at some point. The main thing to watch next week is a no confidence vote in Sweden on Monday, which seems likely to pass. While the short-term macro implications would be limited, it could exacerbate the near-term pressure on the Swedish krona.