MNI BRIEF: Bank Of Italy Downgrades 2024 Inflation Forecast

CANADA MAR JOBLESS RATE 6.1% VS FORECAST 5.9%, PRIOR 5.8%

MNI: Canada Wages Up 5% Even With Highest Jobless Rate In 2Yrs

MNI BRIEF: Monetary, Fiscal Policy Need Harmony - Campos Neto

CORRECTED-MNI: Changing Brazil Fiscal Target Not "Plan A"

MNI BRIEF: PBOC To Curb Any Overshooting Of The Yuan-MPC

MNI: US FEB CONSUMER CREDIT +$14.1B

MNI: BAKER HUGHES US RIG COUNT 620; OIL RIGS 508; GAS RIGS 110

EZ/UK Bond Supply Calendar: EU-Bond Auction, BoE Short APF Mon

MNI BRIEF: Poilievre Calls QE 'Scam' And Would Limit BOC Remit

MNI: Growth Drag From Net Zero Carbon Goal Can Be Offset-OECD

MNI BRIEF: Lawmakers Signal Tough Hearing For BOC's Macklem

© 1982-2023 MNI. All rights reserved.
Terms | Privacy
Log Out
Free Trial

Riksbank Opens Door To H1 '24 Rate Cuts; QT Increased To SEK6.5bln/month

RIKSBANK
DataHomepageData BulletBulletMarketsFixed Income BulletsForeign Exchange Bullets

The Riksbank have indicated in their February policy statement that rates can "probably be cut sooner than was indicated in the November forecast", with the risk of inflation becoming entrenched now lower. The statement notes that "the possibility of the policy rate being cut during the first half of the year cannot be ruled out".

  • Rates were held at 4.00% in a unanimous decision amongst the Executive Board.
  • SEK has knee-jerked weaker as a result (around 0.2% weaker versus EUR), with a lower-than-expected increase in the pace of QT (to SEK6.5bln/month ) also factoring in.
  • With respect to QT, the analyst median of the previews we had read looked for an increase to SEK7bln, with a SEK5bln-SEK8bln range. Of the SEK6.5bln/month (which was in line with the MNI Markets team expectation), SEK5.7bln will be nominal government bond sales, with linkers making up the rest.
  • Most analysts had already expected the policy rate to be cut in H1 2024, in some cases as early as May.
  • The Riksbank acknowledges that CPIF ex-energy has evolved below the November forecasts, creating "greater certainty in the assessment of inflation".
  • Despite this, monetary policy needs to be "adjusted cautiously", with risks to the outlook including "renewed supply shocks resulting from the geopolitical unease, company pricing behaviour not yet having normalised, or the krona weakening substantially once again".
  • The press conference (in Swedish) will give more colour at 10:00GMT / 11:00CET

230 words

To read the full story

Close

Why MNI

MNI is the leading provider

of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.

Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.

The Riksbank have indicated in their February policy statement that rates can "probably be cut sooner than was indicated in the November forecast", with the risk of inflation becoming entrenched now lower. The statement notes that "the possibility of the policy rate being cut during the first half of the year cannot be ruled out".

  • Rates were held at 4.00% in a unanimous decision amongst the Executive Board.
  • SEK has knee-jerked weaker as a result (around 0.2% weaker versus EUR), with a lower-than-expected increase in the pace of QT (to SEK6.5bln/month ) also factoring in.
  • With respect to QT, the analyst median of the previews we had read looked for an increase to SEK7bln, with a SEK5bln-SEK8bln range. Of the SEK6.5bln/month (which was in line with the MNI Markets team expectation), SEK5.7bln will be nominal government bond sales, with linkers making up the rest.
  • Most analysts had already expected the policy rate to be cut in H1 2024, in some cases as early as May.
  • The Riksbank acknowledges that CPIF ex-energy has evolved below the November forecasts, creating "greater certainty in the assessment of inflation".
  • Despite this, monetary policy needs to be "adjusted cautiously", with risks to the outlook including "renewed supply shocks resulting from the geopolitical unease, company pricing behaviour not yet having normalised, or the krona weakening substantially once again".
  • The press conference (in Swedish) will give more colour at 10:00GMT / 11:00CET