Mats Hydén, Research Analyst at Nordea Markets, suggests that with an unchanged repo rate path from the Riksbank next week, a first rate hike according to Riksbank’s own forecast will be close at hand ahead of the September meeting.
Key Quotes
“This may put a floor to the slope of the money-market curve over the summer.”
“We believe in an unchanged repo rate path at the policy announcement 3rd July and only minor revision of the macro-economic forecast. Higher energy prices have pushed CPIF inflation 0.4% percentage points above Riksbank’s forecast and that is really the only major revision we expect.”
“The market is currently pricing somewhat lower probability of rate hikes during Q4 2018 and early 2019 than is implied by the Riksbank’s rate path.”
“If the repo rate path is left unchanged at the upcoming meeting, the first rate hike communicated through the repo rate path will be very close in time in the period ahead of the policy meeting in early September.”
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