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MNI Riksbank Preview: August 2024 - Policy Easing Continues

The Riksbank is unanimously expected to deliver its second interest rate cut of 2024 at its August meeting.
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EXECUTIVE SUMMARY

  • The Riksbank is unanimously expected to deliver its second interest rate cut of 2024 at its August meeting, bringing the policy rate to 3.50%. 
  • The MNI Markets team thinks that the latest developments in inflation, economic activity and the exchange rate have cemented the case for a 25bp cut in August.
  • We also think there is a good chance that the Riksbank opens the door to cuts at each of its remaining meetings in 2024 (September, November, December) in its guidance. 
  • Of the 18 analyst previews we have seen, all expect a 25bp rate cut in August, with many also expecting a dovish tilt in the Riksbank’s guidance.
  • With an August cut fully priced, the market reaction will hinge on the guidance within the policy statement. However, with the risks to the decision clearly already skewed in a dovish direction, the prospects for material SEK weakness may be limited. 

MNI (LONDON) - Access the full preview, including a summary of 18 sell-side views, using the following link: MNI Riksbank Preview - 2024-08.pdf

 

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EXECUTIVE SUMMARY

  • The Riksbank is unanimously expected to deliver its second interest rate cut of 2024 at its August meeting, bringing the policy rate to 3.50%. 
  • The MNI Markets team thinks that the latest developments in inflation, economic activity and the exchange rate have cemented the case for a 25bp cut in August.
  • We also think there is a good chance that the Riksbank opens the door to cuts at each of its remaining meetings in 2024 (September, November, December) in its guidance. 
  • Of the 18 analyst previews we have seen, all expect a 25bp rate cut in August, with many also expecting a dovish tilt in the Riksbank’s guidance.
  • With an August cut fully priced, the market reaction will hinge on the guidance within the policy statement. However, with the risks to the decision clearly already skewed in a dovish direction, the prospects for material SEK weakness may be limited. 

MNI (LONDON) - Access the full preview, including a summary of 18 sell-side views, using the following link: MNI Riksbank Preview - 2024-08.pdf