Markets are fully pricing in a 25 bps hike, which is also the consensus view and our house call. The weakness of the Swedish Krona is a major reason why the Riksbank cannot underdeliver compared to market expectations.

The risks are that some Riksbank members focus on the economic and inflation slowdown and oppose a rate hike or an upward revision in the rate path. This happened back in April and paved the way for a long period of SEK depreciation. Our base case is that the Riksbank will not make the same mistake again and deliver a convincingly hawkish and FX-supportive hike today. 

We see EUR/SEK drop to the 11.77 mark in a hawkish scenario today. 

A dovish surprise would make a rally to above 12.00 levels very feasible.