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TD Securities analysts point out that the Riksbank left the monetary policy outlook largely unchanged at its July meeting, but did lay the groundwork for a shift in September.

Key Quotes

“Given the developments in the global economy since the Riksbank last met, we believe that monetary policy forecasts will indeed need to be adjusted at next week’s meeting.”

“We look for the Riksbank to remove any chance of rate hikes this year, and push the first rate hike back toward the end of 2020. In fact, we see about a one-third chance that the Riksbank will go as far as signaling an easing bias, inserting about 2-3bps of rate cuts over the next half year. However, given the uncertainty around what exactly the ECB is going to announce at its next policy meeting on 12 September, we think that the shift to an easing bias is more likely to come in October, once the ECB’s path is more clear.”