NatWest Markets' view ahead of.............>

RIKSBANK: NatWest Markets' view ahead of tomorrow's Riksbank announcement.

- Expect asset purchases to be extended into 2021 but say "this is more likely

to be announced in September than July." Looks for expansion from SEK300bln to

SEK400-500bln with purchases through H1 2021.

- Expect the repo rate path to show no change to the policy rate until 2023.

- Expect only one growth forecast (rather than the two scenarios) and for 2020

growth to be more optimistic than the positive scenario seen in April. NatWest

looks for a revision to a "-5 to -6% contraction in 2020 GDP".

- Expect the Riksbank to verbally state that negative rates remain a possibility

but do not expect any near-term probability in the rate path.

- NatWest note that only SEK230bln of the SEK300bln purchase programme has been

allocated so far. "This will likely remain primarily focussed on covered bonds,

but we also expect an increase in government bond purchases after the large

increase in issuance recently announced by the Debt Office."