Deflation theme spreads around Europe Both the UK and Sweden yesterday reported weak inflation numbers, with the latter tilting into outright deflation in headline terms and near the lowest level in a decade in core terms. SEK was absolutely hammered as this came just ahead of a key resistance level, and there was effectively no liquidity in EURSEK for several figures as the pair rushed higher and may be on the road for a test of the 9.00 level at minimum in the weeks ahead, particularly if we get an increase in the anticipation of a Fed taper, which tends to squeeze the least liquid currencies the hardest. Note that ... (full story)