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31 Mar 2015
Riksbank might ease further – BAML
FXStreet (Barcelona) - Myria Kyriacou, FX Strategist at BofA-Merrill Lynch, expects the Riksbank to cut rates further and increase the size of QE, and maintains a medium-term positive outlook on the SEK.
Key Quotes
“The Riksbank seems determined to contain SEK strength that would counter their efforts to stimulate inflation. We expect we will see further easing, with an additional small cut possible as well as an increase in the size of QE. Currency interventions cannot be ruled out.”
“However in the face of open-ended ECB QE, we feel that the Riksbank will have less scope to expand its balance sheet.”
“Ultimately, the medium term outlook for SEK remains positive.”
“Inflation and inflation expectations remain the most important data releases to watch, but the level of SEK becomes an additional important gauge of Riksbank action.”
“We adjust the front end of our forecasts, moving 2Q15 to 9.30, but maintain our yearend target at 9.10.”
Key Quotes
“The Riksbank seems determined to contain SEK strength that would counter their efforts to stimulate inflation. We expect we will see further easing, with an additional small cut possible as well as an increase in the size of QE. Currency interventions cannot be ruled out.”
“However in the face of open-ended ECB QE, we feel that the Riksbank will have less scope to expand its balance sheet.”
“Ultimately, the medium term outlook for SEK remains positive.”
“Inflation and inflation expectations remain the most important data releases to watch, but the level of SEK becomes an additional important gauge of Riksbank action.”
“We adjust the front end of our forecasts, moving 2Q15 to 9.30, but maintain our yearend target at 9.10.”