16 Feb 2015
Expect further easing by the Riksbank – TDS
FXStreet (Edinburgh) - In light of the recent move by the Riksbank, Strategist at TD Securities Jacqui Douglas sees the Riksbank easing further in the near term.
Key Quotes
“So going forward, we look for another 10-15bps rate cut from the Riksbank at the April meeting at the very latest, in addition to another SEK10bn of QE announced at that point”.
“However, given the potential scope of downside surprises to inflation, we think that the odds of an intermeeting rate cut are probably greater than 50% now”.
“If we had to pin down a likely date, we’ll get the Feb CPIF data on 11 March, which according to our forecasts should bring the second month of steep downside surprises, and then there is a (non-monetary policy) meeting of Executive Board one week later on 18 March”.
“To us it looks like there is a very good chance of a rate cut at that time, especially given the long period in between policy meetings this time around. So we could have more Riksbank surprises to come still this quarter”.
Key Quotes
“So going forward, we look for another 10-15bps rate cut from the Riksbank at the April meeting at the very latest, in addition to another SEK10bn of QE announced at that point”.
“However, given the potential scope of downside surprises to inflation, we think that the odds of an intermeeting rate cut are probably greater than 50% now”.
“If we had to pin down a likely date, we’ll get the Feb CPIF data on 11 March, which according to our forecasts should bring the second month of steep downside surprises, and then there is a (non-monetary policy) meeting of Executive Board one week later on 18 March”.
“To us it looks like there is a very good chance of a rate cut at that time, especially given the long period in between policy meetings this time around. So we could have more Riksbank surprises to come still this quarter”.