The meeting of the Bank of Sweden took place without any surprises. It was expected to fall by 0.25% and it did. Inflation in Canada also did not surprise, but the direction of change is pleased. Despite successes in combating inflation, Turks are still maintaining high interest rates.
Swedes Lower Interest Rates
As anticipated by analysts, there was a decrease in interest rates in Sweden yesterday. The main rate is currently 3.5%, which is a decline by 0.25% compared to the previous month. Markets expected such decisions, hence there was no weakening of the Swedish krona exchange rate after its announcement. It is worth noting that the interest rate in Stockholm is currently 0.75% lower than in the eurozone. As a result, one can expect that further reductions will happen only when the ECB returns to cuts. Especially given that inflation in Sweden is still 2.6%, which is above the target levels.
Canadian Inflation as expected
Prices in Canada did not surprise analysts. The annual rate was supposed to fall from 2.7% to 2.5% and it dropped as such. However, the core inflation which is clearly lower than consumer inflation deserves attention. This shows us that the prices of food and energy are causing the annual result to be so high. As a result, barring any escalation in the Middle East, and looking at oil prices, the market is beginning to play under this, one can anticipate further declines in the rate of price growth. This, in turn, should translate into increased chances for interest rate cuts.
Turkey does not change interest rates
We have recently had significant successes in combating inflation across the Bosporus. The annual rate of price increase was the lowest since last October. There is also another side to this information. Namely, it was 61.78%. With such results, there is room to fall. By the way, it is strange that a country that has inflation a good order of magnitude higher than EU countries, presents it with two-digit precision, while in the EU the standard is one decimal place. Despite this success in fighting inflation, the local central bank did not decide on interest rate cuts. The market reacted to the retention of interest rates by devaluing the Turkish lira.
Today in the macroeconomic data calendar it is worth paying attention to:
20:00 – USA – minutes from the FOMC meeting.
Maciej Przygórzewski – Chief Analyst at InternetowyKantor.pl and Walutomat.pl
Source: https://ceo.com.pl/szwedzi-obnizaja-stopy-procentowe-inflacja-w-kanadzie-pod-kontrola-94903
