Sweden inflation data and Riksbank minutes released

The Riksbank's negative rate policy is proving effective in stabilizing medium-term inflation expectations and has recently fuelled an uptick in inflation. CPIF seen averaging around 1.65% y/y in H1 2016, slightly below the Riksbank's projections, making it hard for the Bank to justify more aggressive rate cuts in an environment of solid domestic growth. For this week's inflation data (Thursday), CPIF inflation is expected to post a 1% y/y increase. 

"TNS Prospera Sifo will be publishing its report on inflation expectations (Wednesday), and we expect to see continuous stability in the upward trend towards the Bank's inflation target", says Barclays.

Moreover, the Riksbank will be publishing minutes of its October policy meeting (Tuesday). All board members are expected to have voted in favour of unchanged rates and a time extension of QE. Modest EURSEK depreciation but highlight the risk of an additional repo rate cut in December given the Riksbank's reactivity to policy abroad. An inflation miss this week will likely increase market pricing for a December cut and weigh on SEK.