Back
8 Feb 2016
Riksbank preview: Easing before the ECB, or wait? – Nomura
Research Team at Nomura, expects the Riksbank to maintain its dovish stance this week (11 February), as SEK is trading more strongly than the Bank expected and the latest inflation data have been disappointing.
Key Quotes
“The timing of this week’s meeting is tricky though, as an ECB easing is highly expected at the next meeting in March. Thus, the decision will be a close call again. The Bank is likely to need to ease sooner rather than later to prevent SEK appreciation, and we attach a 60% probability of easing this week, which should strengthen EUR/SEK toward 9.50, though we do not see much upside room above 9.50.
The possibility of no action cannot be ruled out, as the Bank may want to monitor what the ECB does at its meeting in March and SEK movements before and after the ECB meeting. The Bank’s communications are likely to remain dovish to prevent SEK appreciation in this scenario. A knee-jerk EUR/SEK depreciation to 9.30 or below is likely, if the Bank disappoints, but intervention concerns will likely emerge as EUR/SEK approaches 9.20.”
Key Quotes
“The timing of this week’s meeting is tricky though, as an ECB easing is highly expected at the next meeting in March. Thus, the decision will be a close call again. The Bank is likely to need to ease sooner rather than later to prevent SEK appreciation, and we attach a 60% probability of easing this week, which should strengthen EUR/SEK toward 9.50, though we do not see much upside room above 9.50.
The possibility of no action cannot be ruled out, as the Bank may want to monitor what the ECB does at its meeting in March and SEK movements before and after the ECB meeting. The Bank’s communications are likely to remain dovish to prevent SEK appreciation in this scenario. A knee-jerk EUR/SEK depreciation to 9.30 or below is likely, if the Bank disappoints, but intervention concerns will likely emerge as EUR/SEK approaches 9.20.”