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11 Feb 2016
Riksbank expected to stay pat – TDS
Research Team at TDS, suggests that Riksbank is not expected to change policy, though the decision is finely balanced.
Key Quotes
“From an economic perspective, the Swedish economy is doing well, but the Riksbank is worried about SEK, and given its track record of easing when not fully justified, we cannot rule out another -10bp cut (which is consensus).
While recent financial market volatility would further lead us to worry about a new rate cut, in fact, SEK has materially weakened as market stresses have built, which still leaves us marginally more in favour of the Riksbank leaving rates on change for the time in which the currency is moving in their favour. We expect the PES unemployment rate, which isn’t seasonally adjusted, to tick up to 4.3% on the month, reflecting the usual seasonal pattern.”
Key Quotes
“From an economic perspective, the Swedish economy is doing well, but the Riksbank is worried about SEK, and given its track record of easing when not fully justified, we cannot rule out another -10bp cut (which is consensus).
While recent financial market volatility would further lead us to worry about a new rate cut, in fact, SEK has materially weakened as market stresses have built, which still leaves us marginally more in favour of the Riksbank leaving rates on change for the time in which the currency is moving in their favour. We expect the PES unemployment rate, which isn’t seasonally adjusted, to tick up to 4.3% on the month, reflecting the usual seasonal pattern.”