Sweden’s inflation slowed more than expected in November, but the Riksbank is unlikely to shift dovish given improved growth and cautious guidance, ING's FX analyst Francesco Pesole notes.

EUR/SEK path intact despite soft data

"Sweden’s preliminary inflation figures for November came in lower than expected. Headline CPIF slowed sharply from 3.1% to 2.3% (exp. 2.5%) and the core measure excluding energy from 2.8% to 2.4% (exp. 2.6%)."

"Despite the larger-than-expected deceleration, the bar for any dovish repricing in the SEK OIS curve remains elevated. The Riksbank cut rates to 1.75% without any strong dovish data signals and would need to see some material risks of inflation undershooting the target before putting another cut on the table. Especially considering the growth outlook has improved."

"We remain confident in the EUR/SEK profile presented in our FX Outlook, with 10.90 as a target for end-December, and then a gradual decline to 10.50 by end 2026."