Preliminary data released this morning show that the Swedish economy contracted by 0.8% q/q in Q2, more than offsetting the 0.7% increase in Q1. The data were significantly weaker than expected by both the consensus and us (consensus: -0.4%; CE: 0.0%) and increase our confidence that the Riksbank will cut its policy rate further this year from 3.75% to 3.00%, with the next cut coming at the policy meeting in three weeks’ time.
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