2 Jul 2015
Riksbank expected to remain ‘on hold’ – Danske Bank
FXStreet (Edinburgh) - Senior Analyst at Danske Bank Christin Tuxen expects the Riksbank to stay put at today’s monetary policy meeting.
Key Quotes
“In Sweden, our main scenario is that the Riksbank will be on hold today”.
“However, there are two factors that could make the Riksbank cut the repo rate by 10-15bp again already at this point: 1. the Riksbank's inflation forecast for the autumn is too optimistic. No other forecaster is close to the Riksbank's inflation path, something the Riksbank is aware of,”
“2. the SEK is now stronger in terms of KIX than before the Riksbank cut the policy rate to negative territory and before any QE purchases were announced. KIX is now 2.8% stronger than the Riksbank's forecast. Hence, the appreciation of the SEK could jeopardise the elevated Riksbank inflation forecast and prompt action today”.
Key Quotes
“In Sweden, our main scenario is that the Riksbank will be on hold today”.
“However, there are two factors that could make the Riksbank cut the repo rate by 10-15bp again already at this point: 1. the Riksbank's inflation forecast for the autumn is too optimistic. No other forecaster is close to the Riksbank's inflation path, something the Riksbank is aware of,”
“2. the SEK is now stronger in terms of KIX than before the Riksbank cut the policy rate to negative territory and before any QE purchases were announced. KIX is now 2.8% stronger than the Riksbank's forecast. Hence, the appreciation of the SEK could jeopardise the elevated Riksbank inflation forecast and prompt action today”.