2 Jul 2015
Riksbank cuts rates by 10bps, further easing ahead by November – TDS
FXStreet (Barcelona) - The TD Securities Team reviews today’s Riksbank’s policy decision, noting that the central bank cut rates by 10bps today and further signalled for another cut by November.
Key Quotes
“Against our expectations and the majority of consensus and market pricing, the Riksbank once again delivered very aggressive easing. The Riksbank cut the repo rate a further 10bps to –0.35%, extended QE from September to end-year, and further reduced the repo profile to show the risk of a further 6bps of cut by November.”
“The driving factors appear to be a downgrade in the inflation profile over the next three years, and some mention of near-term uncertainties regarding Greece.”
“Although we had a dissent against the rate cut, the Riksbank continues to be aggressive in trying to limit SEK appreciation. But in a small tweak to their bias, they were now more comfortable discussing that it was natural that SEK would appreciate somewhat from here, but will be more concerned with the pace of that for now.”
Key Quotes
“Against our expectations and the majority of consensus and market pricing, the Riksbank once again delivered very aggressive easing. The Riksbank cut the repo rate a further 10bps to –0.35%, extended QE from September to end-year, and further reduced the repo profile to show the risk of a further 6bps of cut by November.”
“The driving factors appear to be a downgrade in the inflation profile over the next three years, and some mention of near-term uncertainties regarding Greece.”
“Although we had a dissent against the rate cut, the Riksbank continues to be aggressive in trying to limit SEK appreciation. But in a small tweak to their bias, they were now more comfortable discussing that it was natural that SEK would appreciate somewhat from here, but will be more concerned with the pace of that for now.”