Swedish CPI preview and index-linked bonds
We expect that CPI will decrease by 0.3% in July corresponding to a y/y inflation rate of 0.7%.
Record low electricity prices are holding Swedish inflation down while food prices are continuing to rise. Although the strong Swedish Krona is a force for lower inflation, we fail to see any obvious impact on the shape of the real rate yield curve.
Given the ultra-flat Swedish yield curve, both compared to international and nominal curves, we like short-term linkers better than long term.