Nomura strategists are predicting Sweden’s Riksbank will hold its policy rate steady at 1.75% through August and maintain that level until at least 2026, despite mounting upside risks to the rate trajectory. The forecast comes as markets assess the Swedish central bank’s next moves amid evolving inflation dynamics and economic conditions in the Nordic region.
The Japanese bank’s outlook suggests a prolonged pause in Sweden’s monetary policy cycle, contrasting with potential paths other central banks may take. Traders positioning in Swedish krona and Scandinavian fixed income markets should note the extended timeline for rate stability, though Nomura acknowledges increasing probability of rate hikes rather than cuts as key risks to their base case scenario.
This forecast impacts currency pairs involving SEK, Swedish government bonds, and derivative instruments tied to Riksbank policy expectations. Market participants trading Nordic assets will need to monitor inflation data closely as any upside surprises could force the Riksbank to deviate from the projected hold pattern.
FXnCO Insight
Swedish krona positions should be hedged against hawkish surprises as inflation risks threaten Nomura’s extended rate hold forecast through 2026.
Source: FXStreet