BoJ and Riksbank to be the main events this week – Danske Bank

The main events this week will be the Bank of Japan meeting on Thursday and the meeting in the Riksbank on Wednesday, according to analysts at Danske Bank.

Key Quotes

“There has been some focus on the potential negative impact of the negative deposit rate and yield curve control in Japan, but we do not expect the BoJ to change policy. The BoJ policy is to some extent pushing Japanese investors towards foreign assets, although it is getting increasingly expensive to hedge USD-denominated fixed income assets, while still ‘cheap’ to hedge DKK, SEK and EUR assets back into JPY.”

“The Riksbank is expected to end QE but as coupons and redemptions are reinvested, the Riksbank will still be buying bonds in 2018. However, the main focus is on the policy path and the first hike, where the market expects an early hike. We think differently and expect them to keep the rate path unchanged and avoid signalling a premature hike.”