10 Mar 2015
Key day for the Riksbank tomorrow – TDS
FXStreet (Edinburgh) - Jacqui Douglas, Strategist at TD Securities, assessed the scenarios that could face the Riksbank in light of the inflation figures due tomorrow.
Key Quotes
“Wednesday data will either firm up the odds of an intermeeting rate cut from the Riksbank, or push the next easing back to the regularly-scheduled meeting on 29 April”.
“A combination of sticky (low) inflation expectations, a downside miss in CPI, and the recent currency strength, would add up to a probable 10-15bps rate cut by the end of next week, possibly around the non policy meeting already scheduled for 18 March”.
“As for FX, we like being long CADSEK at the moment, as it looks to be heading toward a retest of the 6.87 highs from earlier this year. And with the Riksbank looking to be more aggressively dovish than the Bank of Canada, we could easily see new highs for the cross in the case of a Swedish rate cut”.
Key Quotes
“Wednesday data will either firm up the odds of an intermeeting rate cut from the Riksbank, or push the next easing back to the regularly-scheduled meeting on 29 April”.
“A combination of sticky (low) inflation expectations, a downside miss in CPI, and the recent currency strength, would add up to a probable 10-15bps rate cut by the end of next week, possibly around the non policy meeting already scheduled for 18 March”.
“As for FX, we like being long CADSEK at the moment, as it looks to be heading toward a retest of the 6.87 highs from earlier this year. And with the Riksbank looking to be more aggressively dovish than the Bank of Canada, we could easily see new highs for the cross in the case of a Swedish rate cut”.