Tap auction: SEK500m SGBi3110 (1 June 2019) and SEK 500m SGBi3109 (1 June 2025).
Commodity prices and the oil price in particular have been key for how BEIs have been trading in the past few weeks. Hence, BEI rates have moved lower in line with the oil price.
The Riksbank slashed the short-term inflation forecast last week, up to 0.4%. Despite the change in the inflation outlook, no more monetary measures were announced. We see this as negative for BEI rates, at least given how Swedish BEIs have traded so far in the year relative to European BEIs.
Swedish BEIs have gradually performed in the year, as the Riksbank has been very focused on inflation and inflation expectations. According to this pattern, we should see some underperformance in Swedish BEIs as the ECB, just after the Riksbank, announced that more QE might be in the pipeline in order to keep inflation expectations well anchored.
Nevertheless, we expect decent demand in the auction as headline CPI is widely expected to move higher in the autumn, reaching 1.1% in January, driven by tax hikes, according to our projection. The short end of the BEI curve has cheapened relative to Europe lately. August CPI data will be out one and a half hours before the auction.
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