This week the index-linked auction is split between SEK500bn in the 6-year bond (SGBi3102) and SEK500bn in the 10-year bond (SGBi3109). Breakeven inflation rates have come down somewhat since the last auction, especially in longer maturities. The demand in the auction should be supported by the lower BEI rates but the outlook for higher inflation short term has probably deteriorated given the movements in commodity and FX markets .
The hefty decline in the oil price (and other commodities) over the past weeks has, together with the movements in the FX market, moved BEI rates globally. However, the depreciation of the SEK/USD has resulted in limited impact on domestic petrol prices, at least so far and according to official list prices . Hence, Swedish BEI rates may not decline like they have done in some other markets.
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