JP Morgan's view ahead of tomorrow's.......>

RIKSBANK: JP Morgan's view ahead of tomorrow's Riksbank announcement.

- Forecast an unchanged policy rate in 2020 and 2021.

- JP Morgan states that "it cannot be ruled out that the Riksbank will lower the

path slightly to indicate some probability of a rate cut, in order to make its

point that negative rates are still part of the toolbox."

- JP Morgan argues that given the recent data "the Riksbank scenarios from April

look too pessimistic and we think the Riksbank will present an upward revised

GDP forecast next week. Nevertheless, we expect the Riksbank language to

continue to be cautious"

- Think that "the Riksbank is afraid of entering negative and then getting

permanently stuck there."

- Risks are "clearly skewed" towards a QE extension later this year,

particularly as JP Morgan expects the Fed to continue buying bonds and the ECB

to announce a PEPP expansion of EUR750bln in Q4. They believe that any QE

extension would see purchases concentrated in mortgage bonds.