James Rossiter, Senior Global Strategist at TDS, suggests that the Riksbank meets this week for the first time since mid- December and they expect them to hold firm on policy, but the risks are once again high that they ease.
Key Quotes
“The Swedish economy continues to out-perform its G10 peers, inflation is on a path towards target, and the KIX remains range-bound. We think this argues for no action this week.
That said, the Riksbank has built a proclivity to ease proactively, and for this reason we flag a significant risk that the repo rate is cut further this week regardless of the currently sound economic fundamentals. Indeed, markets are pricing about a 60% chance of a 10bps cut.”
(Market News Provided by FXstreet)