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Danske: QE will be extended, but not in November

RIKSBANK
  • Danske believes "that QE (in excess of reinvestments of the SGB1054) will at some point be extended into H2 21 and possibly the Riksbank could give a hint about this now but we do not see a strong case for the Riksbank fixing volume more than seven months in advance."
  • Expect "unchanged rate projection (at zero)"
  • Note that Q3 growth was stronger than expected but there are downside risks to Q4 20 an Q1 21. "If [the Riksbank] feels obliged to respond to these increased downside risks, it seems more logical to act now by increasing QE rather than to announce more QE in H2 21. Still, this is not our base case."

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