Riksbank Review: QE extension coming in October - RBS

Nick Mannion, Research Analyst at RBS, notes that the Riksbank made no changes to rates or to its QE programme at its September meeting which was in line with the expectations.

Key Quotes

“Yet the bank still sees considerable uncertainty surrounding international developments and reiterated that it remains highly prepared to make monetary policy even more expansionary should the prospects for inflation deteriorate.

We expect a SEK 30bn one-quarter extension of QE at the October meeting, as it becomes clear that Riksbank is still too optimistic on growth and inflation and that more must be done to offset ongoing aggressive ECB balance sheet expansion.

We also think rate cuts can return to the agenda next year if the ECB further lowers the deposit rate and the SEK appreciates too quickly for comfort. We stay received SEK 3f1y and short EUR/SEK.”