Tomorrow's Riksbank meeting has a higher...>

RIKSBANK: Tomorrow's Riksbank meeting has a higher potential to be market moving

than either the Norges Bank or the ECB.

- The key factor will be the Riksbank's updated repo rate forecast. In the

September meeting, the path was left unchanged which we estimate meant the

Riksbank were forecasting a 10% probability of an October hike, 70% probability

of a hike by December and a hike by February as fully priced.

- There is a general split between local and international banks in their

estimations. Locals generally expect the Riksbank to push back the next expected

hike by at least one quarter due to a deteriorating domestic and external

environment. However, there are a number of non-local institutions who expect

the Riksbank to keep its guidance of a hike at the end of this year or beginning

of next unchanged - citing a negative output gap and a desire for the Riksbank

to move away from negative interest rates.

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