The Swedish CPI is finally coming back from double-digit territory, but is still the highest in G10 and very far away from the 2% target. Worryingly, the decline is more attributable to lower energy prices than core inflation. 

Riksbank’s room for manoeuvre is also limited by households’ very high leverage, with Swedish residential prices plunging 20% this year, and a real estate crisis threatening the economy. 

With both the ECB and BoE affirming their hawkish stances, and the surprise 50 bps hike from the Norges bank, the SEK still looks very vulnerable.