Nomura economists expect Sweden\u2019s Riksbank to keep the policy rate at 1.75% at the 19 March meeting, and to leave it unchanged through 2026. They see weak CPIF ex-energy inflation and soft GDP indicators, but also inflation risks from the Middle East conflict and higher energy prices.<\/p>\n
They expect the Riksbank to repeat guidance that the rate is expected to remain at this level for some time. In new forecasts, CPIF ex-energy inflation may be revised down slightly, while CPIF may be revised slightly higher.<\/p>\n
The analysis notes concerns about second-round effects from higher energy costs, alongside more uncertainty for inflation and economic activity. It also points to possible demand impacts, with uncertainty affecting confidence to spend and invest.<\/p>\n
Sweden is described as having a fragile recovery after slow or negative GDP growth in 2022 and 2023. Monthly GDP data suggest output fell in both December and January.<\/p>\n
Nomura expects no rate change this year and a hike at the end of 2027, taking the rate closer to the middle of the neutral range of 1.50%\u20133.00%. It adds that a quick end to the conflict and weaker inflation could bring a cut this year, while a longer conflict could bring faster inflation and an earlier hike.<\/p>\n
With the Riksbank widely expected to hold its policy rate at 1.75% this week on March 19, short-term rate volatility should remain low. Given this stability, traders could consider strategies that profit from a lack of movement, such as selling short-dated options on Swedish interest rate futures. This stance is supported by the Riksbank’s likely guidance that rates will stay at this level for some time.<\/p>\n
We are seeing a clear conflict between weak domestic data and external inflation risks. Recent statistics showed that Sweden’s GDP contracted by 0.2% in the final quarter of 2025, and CPIF ex-energy inflation for February came in just under the 2.0% target. However, with Brent crude oil recently trading around $95 per barrel due to Middle East tensions, the Riksbank cannot risk cutting rates yet.<\/p>\n
This paralysis suggests that the yield curve might steepen, as short-term rates remain anchored while longer-term rates reflect future inflation and growth possibilities. The fragile recovery we have seen since the slowdown of 2023 and 2024 is being hampered by this uncertainty, making long-dated rate hike expectations a key area to watch. Traders might look at instruments betting on higher rates further out, perhaps in late 2027.<\/p>\n
The primary divergence will be driven by geopolitics, creating a binary outcome for traders to position for. A de-escalation in the Middle East could quickly bring rate cuts back into play, while a wider conflict would almost certainly force the Riksbank to hike sooner than planned. This makes buying longer-dated, out-of-the-money options a viable strategy to position for a significant policy shift in either direction.<\/p>\n
Create your live VT Markets account<\/a>\u00a0and\u00a0start trading<\/a>\u00a0now. <\/b><\/p>\n","protected":false},"excerpt":{"rendered":" Nomura expects Riksbank to hold 1.75% through 2026, citing weak inflation, soft GDP, but energy risks.<\/p>\n","protected":false},"author":103,"featured_media":17026,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[59],"tags":[],"class_list":["post-51528","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-live-updates"],"acf":{"acf_article_selection_author":null},"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts\/51528","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/users\/103"}],"replies":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/comments?post=51528"}],"version-history":[{"count":0,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts\/51528\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/media\/17026"}],"wp:attachment":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/media?parent=51528"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/categories?post=51528"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/tags?post=51528"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}