The Riksbank will announce its monetary policy decision today and analysts at Nordea Markets expect the bank to continue keeping the door ajar for a rate hike at the October meeting (40% implied in the rate path – unchanged from last meeting).
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“This could pave the way for hawkish Riksbank bets in both the Fixed Income and FX space. Usually past weakness in the SEK has spilled over to a steeper FRA curve with a time lag. We don’t see any reason to expect that it should not be the case this time around.”
“Ironically, the Riksbank could end up as the catalyst for a positive NOK reaction also, as it seems like the weak SEK has been one of the factors holding the NOK back despite a hawkish Norges Bank.”
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