© 1982-2022 MNI. All rights reserved.
Terms | Privacy
Log Out
Free Trial
JGB TECHS

(U2) Solid Bounce Into the Close

USDCAD TECHS

Bullish Price Structure

AUDUSD TECHS

Clears Key Support

EURJPY TECHS

Retracement Mode

COMMODITIES

Oil Supply Constraints Trump Lower Demand

USDJPY TECHS

Pullback Considered Corrective

Real-time Actionable Insight

Get the latest on Central Bank Policy and FX & FI Markets to help inform both your strategic and tactical decision-making.

Free Access
Trending Top 5
Topics

MNI Riksbank Reveiew - Apr 22: Bar to 50bp hikes isn’t out of reach

The Riksbank hiked 25bp yesterday and slowed QE reinvestments for H2. On our calculations the Riksbank sees 100% probability of a 25bp hike under its base case and 100% probability of a 50bp hike under its alternatitve scenario.

Riksbank - ReviewCentral Bank ReviewCentral Bank ReportsMarkets
  • The Riksbank hiked 25bp yesterday - markets had priced in around a 75% probability of a February hike but the only sellside analyst we had seen with a hike as a base case was Swedbank, although most acknowledged a risk of a hike.
  • Just as notable as the immediate changes in policy are the changes in the repo rate path. It is very rare historically for the Riksbank to assign anything in the path a 100% probability but based on our calculations, that is exactly what they have done this week. We estimate the Riksbank’s path is using a 100% probability of a June hike and 90% probabilities of hikes in September and November, with another two hikes next year.
  • However, the Riksbank also notes that “risk outlook for inflation is on the upside, however, particularly in the near term” and published an alternative scenario. Based on our calculation this alternative path sees a 100% probability of a 50bp hike in June and 2% rates by this time next year.

See the full document including summaries of 10 sellside reviews:

MNI Riksbank Review - 2022-04.pdf

189 words

To read the full story

Why Subscribe to

MarketNews.com

MNI is the leading provider

of news and intelligence specifically for the Global Foreign Exchange and Fixed Income Markets, providing timely, relevant, and critical insight for market professionals and those who want to make informed investment decisions. We offer not simply news, but news analysis, linking breaking news to the effects on capital markets. Our exclusive information and intelligence moves markets.

Our credibility

for delivering mission-critical information has been built over three decades. The quality and experience of MNI's team of analysts and reporters across America, Asia and Europe truly sets us apart. Our Markets team includes former fixed-income specialists, currency traders, economists and strategists, who are able to combine expertise on macro economics, financial markets, and political risk to give a comprehensive and holistic insight on global markets.
  • The Riksbank hiked 25bp yesterday - markets had priced in around a 75% probability of a February hike but the only sellside analyst we had seen with a hike as a base case was Swedbank, although most acknowledged a risk of a hike.
  • Just as notable as the immediate changes in policy are the changes in the repo rate path. It is very rare historically for the Riksbank to assign anything in the path a 100% probability but based on our calculations, that is exactly what they have done this week. We estimate the Riksbank’s path is using a 100% probability of a June hike and 90% probabilities of hikes in September and November, with another two hikes next year.
  • However, the Riksbank also notes that “risk outlook for inflation is on the upside, however, particularly in the near term” and published an alternative scenario. Based on our calculation this alternative path sees a 100% probability of a 50bp hike in June and 2% rates by this time next year.

See the full document including summaries of 10 sellside reviews:

MNI Riksbank Review - 2022-04.pdf