Riksbank to show a significant change of tact on Wednesday – Nomura

Analysts at Nomura offer a sneak peek into Wednesday’s monetary policy decision due to be announced by the Swedish Central Bank, Riksbank.

Key Quotes:

“We do not expect Wednesday’s Riksbank meeting to show a significant change of tact from the Riksbank. Positive inflation developments since the last meeting are offset by SEK strength, which should see the repo rate forecast unchanged.”

“The market is likely expecting some possibility of upward revisions on the repo rate forecast. While we do see risks skewed to upward revisions, we think the most likely outcome is no change in the repo rate forecast. This could disappoint market expectations, which would likely see EUR/SEK spike higher.”

“However, given SEK’s strong fundamentals, we think this should be used as a sell EUR/SEK on rallies opportunity.”