We don't expect any major forecast changes from the Riksbank this time around and July GDP projections are relatively optimistic. On the other hand, labour market conditions seem to improving more quickly than thought.
The Riksbank will probably move towards earlier hikes than according to the current rate forecast - but not just now. There should be good reason to remove the easing bias expressed for 2013. In any case, we believe that the ECB has better reasons for trying to talk rates down than the Riksbank and this is the reason we like to hold on to the short position in Swedish 5s versus Germany until after next week's policy announcements.
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