Europe: It’s all about Riksbank and Norges Bank today - TDS

Research Team at TDS, suggests that we have rate decisions from both Sweden and Norway today which are likely to add on to the FX market volatility.

Key Quotes

“The Norges Bank should be pretty uneventful, with no MPR so no update in its policy rate forecasts and no reason to meaningfully change its tone. The Riksbank though is a bit more of a question mark, with a couple of minority calls for a rate cut today and a lot of questions around the future of its QE program, given concerns that it’s running out of bonds to buy.

While markets moved toward a rather dovish view of Sweden after the downside surprise to September inflation earlier this month, we think that the Riksbank is more inclined to look through that weak print, with the hopes that the uptrend in inflation resumes from here. We’re looking for rates to remain unchanged, for the QE programme to be extended by another SEK30bn through the first half of 2017 (compared to the current pace of SEK45bn through H2 2016), and for a slightly more hawkish tone overall than markets are expecting.”