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Initial react: Hawkish forecasts and govvie bond sales announced

RIKSBANK
  • We flagged government bond sales as a risk in our preview but our based case thought it wouldn't happen until later in the year. The Riksbank has announced these will begin in April. This was not expected by the market.
  • The Riksbank's policy rate forecasts now peak at 3.33% - so pricing in around a 30% probably of 50bp more being needed with 25bp fully priced for April. This rate profile is more hawkish than expected.
  • As we expected there are no cuts in the forecast profile.
  • EURSEK down from 11.3250 prior to the decision to a low of 11.2445.

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