Danske Bank analysts points out that the Riksbank yesterday, took them and the clear majority of forecasters, by surprise by not only keeping the short end of the rate path unchanged but also clearly indicating that rates will be hiked to zero in December, regardless of the MPR highlighting the weaker growth outlook and the global uncertainty.
Key Quotes
“It turned out that ending negative rates is a goal in itself for the Riksbank, in a sense switching from inflation to rate targeting, for more discussion see our take here . The rate path was lowered after the December hike. It now points to a policy rate at zero for an extended period of time.”
“Meanwhile, not much news to report from the small Norges Bank meeting. We stick to the view that the policy rate will be lifted once again in March next year.”
“Yesterday, the ECB meeting did not provide many new signals. The most important piece of news was Draghi indicating that ISIN limits are self-imposed, implicitly suggesting that they can be eased if there is a need to expand the eligible pool of securities that can be bought under the QE programme.”
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