Tomorrow's Riksbank meeting will be........>

RIKSBANK: Tomorrow'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 this week's meeting.