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10Y Vol Sale


2Y10Y Yield Curve Stabilizes Around 25bps

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Today's Riksbank meeting will almost certainly see the Riksbank leave rates anchored at 0% while there will be focus on the repo rate forecast and on QE purchases in Q1-22 (and potentially Q2-22). Against this backdrop will be discussion of how persistent inflation will be.

Base case:

  • MNI expects the Riksbank's extended repo rate forecast puts an average rate of around 0.10% for Q4-24, the first signal of anything other than a completely flat repo rate path. The tone of the Riksbank remains dovish and the inflation forecast shows more near-term upside but still goes comfortably back to target before the end of the forecast horizon. Q1 asset purchase of SEK38bln (including SEK10bln government bonds). Little market reaction (despite markets pricing in a more aggressive tightening path).