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Macro Comment Sweden

Macro Comment Sweden — The EURSEK revisited

The Swedish krona has weakened lately, and as we do not see any near-term triggers for a marked decline in the EURSEK, we revise our forecast for Q4 to 9.60 (previously: 9.30). Moreover, we now expect the decline in the EURSEK in 2018 to be less pronounced, as the main driver, namely a turnaround in the Riksbank's policy, is not on the cards until the second half of the year.

Claes Måhlén, Chief Strategist | clma02@handelsbanken.se

Macro Comment Sweden — Mopping up the package tour mess: inflation to stay close to target over the summer, but will ease this autumn

Inflation will likely be dampened by multiple factors ahead, but is expected to trend close to target for many months to come. This near-term inflation boost is merely a transitory effect from package tour prices, and therefore something the Riksbank will look through. To explain why currently soaring inflation read-ings will not in themselves affect the Riksbank's decisions at the July and September monetary policy meetings, this article takes a look at the nitty-gritty of package tour prices.

Johan Löf, Senior Economist | jolo22@handelsbanken.se

Macro Comment Sweden — US money market reform weighs on STIBOR rates and SEK

• New US money market regulation pushes LIBOR rates higher
• Less incentive for the Fed to hike rates
• STIBOR rates are pushed lower through the FX swap market, hurting the SEK
• Situation unlikely to deteriorate much more 

Claes Måhlén, Chief Strategist | clma02@handelsbanken.se

Macro Comment Sweden — Brexit: implications for the Swedish economy

In this note, we outline a short summary of possible impacts on Sweden in the event of a Brexit.

Macro Comment Sweden — Job vacancies surge to new highs in Sweden

Job vacancies reached record highs in December and new vacancies are now 60 percent higher than at the 2007 business cycle peak. This sign of heat in the labour market is accompanied by a fast-growing mismatch between jobs available and job applicants. This has contributed to rising unemployment among immigrants, especially those from outside the EU, which has kept overall unemployment almost flat in 2015.

Macro Comment Sweden — Riksbank FX intervention a step in the right direction

In a December 30 press release, Riksbank Governor Stefan Ingves strongly hinted that currency interventions might be used if the strength of the Swedish krona threatened a return of inflation to the targeted level in 2016. We see this as a sign that the Riksbank is uncomfortable with further repo rate cuts and is ready to try a new approach to keeping the krona in line with Riksbank forecasts. This is a step in the right direction, in our view, as the repo rate is extremely far out of line with nominal GDP growth, leading to excessive credit expansion. Moreover, currency reserves are small in comparison and pose no restriction on the scale of interventions.