the Riksbank’s signals were duvaktiga and more easing is expected in december. The ECB’s actions and future inflation becomes important. This is according to analysts in the comments after the Riksbank’s announcement on Thursday.
the Riksbank left, as expected, the benchmark interest rate at -0,50%. The repo-rate path is drawn at the same time, the bottom and the first increase is now expected until early 2018. They pull down the inflation forecast, and signals an increased readiness to extend the tillgångsköpen into next year.
Olle Holmgren at SEB, says that the potential for surprises on the upside in terms of growth rates is quite large. He points out that the Riksbank draws down inflationsbanan “pretty much” and that the Riksbank believe that unemployment is levelling off at 6.7%.
Olle Holmgren also believe that you can consider if it is a compromise from the executive board that there was a faction that wanted to act and one who wanted to wait.
“So compromise it by increasing the signalling. It is clearer than ever that it is ready to do more,” he says to the News agency Directly.
He also says that the Riksbank “obvious” is ready to do more and believe that an extension of the obligationsköpen. Which, according to Olle Holmgren also is a sign that the ECB’s actions in december will be very important.
Knut Hallberg at Swedbank said that the announcement from the Riksbank was a little softer than expected, and notes in particular the sharp downward revision of the repo-rate path.
“We also note the increased probability of rate cut in the near future,” he says.
According to Knut Hallberg, Swedbank, sticking to our forecast that the Riksbank will return with a QE extension in december, with a certain scaling-down, in that they believe that the ECB will also announce that it is continuing its tillgångsköpprogram after march 2017.
Knut Hallberg also welcome the lowering of the inflation forecast.
“We see it as a positive that makes the repeats in the inflation forecast. Now it feels more realistic,” he says.
Nordea had expected a rate cut of 10 basis points but still sees today’s message from the Riksbank as much duvaktigt and expects more easing to come, including a lowering of interest rates.
the repo-rate Path was lowered with a probability of 60 per cent for a rate cut of 10 basis points in december, the postponement of the first increase and a lower end point. The riksbank is signaling a readiness to extend the QE programme at the next policymöte.
the Riksbank seems to be satisfied with the development of the Swedish krona in recent months. The crown has traded significantly weaker than forecast, but despite this, the inflation forecast has been revised down substantially for 2017, and even something for 2018. The forecast is now in line with Nordea’s for October and november, but as usual the higher. Nordea does not believe that the goal is reached during the forecast horizon, i.e. until the end of 2018.
“We believe that the Riksbank will ease more in the future. We see a rate cut to -0,60% in december and an extension of the QE program. The program of asset purchases is expected to be extended by 30 billion,” writes Nordea in a comment.
Handelsbanken notes to the Riksbank clearly communicates that they are ready to act again in december with a lower interest rate and/or more asset purchases in 2017.
“One reason for this is that the very low inflation in september. Incoming inflation and foreign central banks ‘ behaviour will be important information for decemberbeslutet,” writes Handelsbanken.