### POV: WATCH THE Q1-19 REPO RATE.........>

RIKSBANK: ### POV: WATCH THE Q1-19 REPO RATE FORECAST

-The Riksbank are almost guaranteed to leave rates on hold at their meeting on

Wednesday with the big debate being over whether they hike in Dec or Feb.

-In the last meeting there was one vote for an immediate hike, one dissent in

favour of keeping October hike in the guidance and one member who disagreed with

pushing back the hike guidance, but not enough to formally dissent. This leaves

two voters likely to vote for an Oct hike and one strongly in favour of Dec. We

have since had strong inflation and the balance of risks suggest either

unchanged or more hawkish guidance (see Friday's State of Play).

- The key thing to watch is the Q1-19 rate forecast (the ave rate for the

quarter). It was previously -0.33%. A move to -0.30% puts a Dec hike at around

75% probability and a move to -0.28% would signal a 90% probably. An increase in

the probability of a Dec hike would likely see EURSEK break below the 200-dma at

10.2733. The next major support would be the July lows at 10.2133.

- If rate forecasts are left unchanged a move up to the 100-dma at 10.3782

should contain the move higher unless there are other dovish changes.