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30 Jun 2014
Riksbank to cut rates on Thursday – Rabobank
FXStreet (Edinburgh) - According to Jane Foley, Senior Currency Strategist at Rabobank, the Riksbank is expected to cut the refi rate by 25 bp in its next meeting.
Key Quotes
“The market is expecting the Riksbank to cut interest rates by 25 bps this week”.
“This reflects the move into deflation (Swedish headline CPI registered a -0.2% y/y fall in May) but is despite the central bank’s concerns about the worryingly high levels of household debt which have been encouraged by the low interest rate environment”.
“There are several central banks at present which are faced with a trade-off between disinflationary/deflationary risk on one hand and worryingly high levels of household debt on the other. These issues are perhaps most marked in Sweden and Switzerland”.
“It is in this environment that the market is expecting another 25 bp cut from the Riksbank this week”.
“In anticipation that there will be a push back against the ECB’s attempts to undermine the EUR, last week we edged higher our EUR/NOK forecasts and pushed up our expectations for EUR/SEK across the board”.
“We would favour buying GBP/SEK and CAD/SEK on dips”.
Key Quotes
“The market is expecting the Riksbank to cut interest rates by 25 bps this week”.
“This reflects the move into deflation (Swedish headline CPI registered a -0.2% y/y fall in May) but is despite the central bank’s concerns about the worryingly high levels of household debt which have been encouraged by the low interest rate environment”.
“There are several central banks at present which are faced with a trade-off between disinflationary/deflationary risk on one hand and worryingly high levels of household debt on the other. These issues are perhaps most marked in Sweden and Switzerland”.
“It is in this environment that the market is expecting another 25 bp cut from the Riksbank this week”.
“In anticipation that there will be a push back against the ECB’s attempts to undermine the EUR, last week we edged higher our EUR/NOK forecasts and pushed up our expectations for EUR/SEK across the board”.
“We would favour buying GBP/SEK and CAD/SEK on dips”.