SNB makes its case (again)

While we doubt that anything conclusive will be agreed at the EU summit this weekend, the likelihood of a joint fiscal package being signed off in due course is consistent with our view that the Swiss franc will end this year broadly in line with its current level. Next week, the main data release of note is unemployment data from Sweden for June, which are likely to show that the unemployment rate ticked up again. Otherwise, look out for our latest Nordic & Swiss Economics Outlook, which we will publish early in the week.
David Oxley Senior Europe Economist
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Nordic & Swiss Economics Weekly

Virus news testing the SNB; “Take 2” for Swedish PM

Market worries about the B.1.1.529 virus variant have exacerbated upward pressure on the safe-haven Swiss franc and will test the SNB’s tolerance of a stronger currency. In our view, the Bank seems to be focused on managing rather than preventing the appreciation against the euro and we suspect that it will eschew large-scale interventions unless the franc reaches the CHF 1.025 per euro mark. Next week, we expect Swedish national accounts data to show that GDP rose by 1.8% q/q in Q3, while Swiss inflation data are likely to show that the headline rate edged down to 1.1% in November.

26 November 2021

Nordic & Swiss Economics Update

Riksbank injects a dash of hawkishness

In comparison to the chaotic scenes in the Riksdag yesterday, the Riksbank’s November meeting was a more sedate affair. While the Bank is in no rush to raise the repo rate, the insertion of a rate hike into the end of its three-year projection period means it is no longer as decidedly dovish.

25 November 2021

Nordic & Swiss Economics Weekly

SNB abandons its long-standing line of defence

We argued only last week that the SNB would be comfortable with letting the Swiss franc rise against the euro. As it happens, after the franc pushed through the long-defended CHF 1.05 per euro mark in trading this morning, we didn’t have to wait long to be vindicated. We think that large-scale interventions are unlikely unless the franc pushes towards CHF 1.025 per euro. Meanwhile, Swedish policymakers are all but certain to leave their policy settings on hold at the Riksbank’s scheduled announcement next Thursday, but we expect them to dial down the dovishness a bit.

19 November 2021

More from David Oxley

Nordic & Swiss Data Response

Norway GDP (May) & Sweden GDP Indicator (May)

The larger-than-expected rise in mainland Norwegian GDP in May indicates that the economy is back in business following the lifting of restrictions, and it is likely to have regained its pre-virus level in June.

7 July 2021

Global Economics Focus

The CBDCs are coming

We expect some major central banks to issue digital currencies later this decade, with those in countries where cash is rarest proceeding the fastest. The first generation of central bank digital currencies will be purposely designed not to shake up the status quo. But once established they would offer powerful new policy tools. It would be naïve to think that sooner or later central banks won’t consider using them.

6 July 2021

Nordic & Swiss Economics Weekly

Löfven exits the stage (not pursued by a bear)

The resignation of Prime Minister Stefan Löfven in Sweden has added to the period of political uncertainty in Sweden. That said, the other leading political actors would probably struggle to pass muster in the Riksdag and so there is a good chance that Mr Löfven will return in the same role before long. Next week, we expect monthly GDP data from Norway to show that mainland activity gathered pace in May, and that core inflation remained below the Norges Bank’s target in June.

2 July 2021
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