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SEB – Expects SEK100bln more QE in November

RIKSBANK
  • SEB's base case (60%) is for the Riksbank's "QE programme to be expanded by SEK 100bn and the planned purchases extended until the end of 2021."
  • SEB "also expect the bank to announce that maturing bonds and coupons amounting to SEK 60bn will be re-invested during next year."
  • "This means that the QE purchases will remain at approximately the current size through-out 2021."
  • SEB thinks that "the board will say that rate cuts are still possible and also that the QE programme can be expanded if needed. The board will also repeat that a period of above target inflation would not be a problem and may even be desirable."
  • Hawkish risk (25%): QE and repo rate path left unchanged.
  • Dovish risk (15%): Repo rate path indicates a chance of a 5bp cut in 2021.

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