The main event today will be the Riksbank meeting, where a 75 basis points hike is widely expected. However, only a 100 bps increase will strengthen the Swedish Krona, economists at Commerzbank report.
Not much support for Krona from hawkish Riksbank?
“As market expectations have also moved in the direction of 75 bps for today’s meeting and as it is clear that the Riksbank will probably hike the rate path I see little appreciation potential for Krona. For that to happen the expected peak of interest rates would have to be moved well above the 3% level with the statement sounding hawkish – something the Riksbank might want to avoid though with a view to the housing market.”
“If, however, today results in 100 bps combined with a significant move in Riksbank key rate expectations to the upside EUR/SEK might finally move away from the 11 mark again on a sustainable basis.”