A preview of the Riksbank meeting today, 5 September 2019.
- Consensus is for on hold (repo rate is at -0.25%)
At the previous (July) meeting indications were the rate would trun positive in 2020, but since then expectation has become that the bank will be more dovish in its outlook.
Nordea with some comments:
- latest batch of NIER sentiment numbers added to the pressure on the Riksbank to turn dovish … looks as if the NIER manufacturing sentiment has entered "easing territory"
- With GDP growth disappointing, weaker business confidence, inflation expectations falling, ECB & Fed in easing mode, and wage negotiation rounds approaching quickly, a "shock and awe" move by the Riksbank can't be ruled out
- Plenty of improvements may indeed be needed to prevent the Riksbank from easing further … we haven't seen any of those improvements yet
