Reminder in 15 mins: Today's Riksbank......>

RIKSBANK: Reminder in 15 mins: Today's Riksbank meeting will be closely watched

with a number of different measures seemingly expected. We read through ten

sell-side previews: two expect a 25bp cut to the policy rate (Danske, GS), one

expects no cut but Covid QE to be doubled in size from SEK300bln to SEK600bln

(SEB) while another expects the Riksbank's forecasts to point to rate cuts later

this year (Swedbank). The remaining QE expect rates and QE to be unchanged. The

only real consensus among the sell-side is that the future rate hikes currently

in the Riksbank's repo rate path will be removed.

- In our view a rate cut is more likely at this meeting than an expansion of QE

(but rates on hold now and QE later would be our base case). The question for us

really is how far away is the bar to rate cuts? Policymakers have been fairly

vague about any changes in view in this respect over the past month so although

we look for no rate changes, we do acknowledge there is a decent risk involved

here. Indeed, had the Riksbank not been so keen to get rates back to zero last

year, we would be expecting a rate cut at today's meeting.