SEK: Bond market vigilantes arrive – ING

In view of analysts at ING, it seems the market is finally starting to question the Riksbank's credibility, now that core inflation and 5-year inflation expectations are running above the Riksbank's target.

Key Quotes

“10-year Swedish-Bund spreads have widened sharply and may give cause for the Riksbank to reconsider its super dovish stance.”

“Swedish data this week is Economic Tendency (Wednesday) and manufacturing PMI (Friday) - all of which should be positive. The case continues to build for a re-assessment of Riksbank policy, warning that complacency on EUR/SEK may be broken at any time by a drop below 9.45/47 support.”