Riksbank: No change in policy rate coming – Nordea Markets

Mats Hydén, analyst at Nordea Markets, suggest that they are expecting no change to the Riksbank policy rate at the announcement 25 April, but a slight downward revision to the rate path near-term and a risk for less bond buying.

Key Quotes

“The market is currently very soft in its pricing of the Riksbank’s future policy path. It is very unlikely that the Riksbank will revise its rate path downward all the way to where the market is. The risk-reward for betting on a soft rate decision is in our view thus poor.”

“One of the more interesting scenarios, although not our main scenario, is the one in which Riksbank is very clear about an intention to hike in September or October while making a major flattening of the rate path 2020+. This would be similar to what the Bank of Norway did recently, and it must surely be interpreted as change to the “reaction function”. It is unusual that the Riksbank uses kinks on the rate path as forward guidance and it would be a very clear signal that it would take a lot to derail yet another hike.”

“Unfortunately, this scenario is also very difficult to map onto possible market reactions. Since a kinked rate path would contain additional hikes while also signaling a changed reaction function it seems reasonable to us that SEK rates increase relative EUR rates in this scenario. But also, in the other scenarios above, the market could very well interpret the Riksbank as relatively hawkish compared to Fed or the ECB.”

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility.

Feed news

Latest Forex News

Editors’ Picks

EUR/USD: Recovery could continue in the short-term

The EUR/USD pair has recovered some ground Friday, ending the week with modest gains at around 1.1050. The American dollar extended its slide as speculative interest couldn’t find a reason to keep on buying it. 


GBP/USD: Brexit hopes maintain Sterling afloat

The GBP/USD pair hit a daily high of 1.2918 on Friday, boosted by news indicating that the  Brexit Party has decided to step down from 43 additional constituencies where Labour won, facilitating the way for a Conservative majority.


USD/JPY: Pressuring resistance but without enough strength

The USD/JPY pair trimmed part of its weekly losses last Friday, closing the week in the red at around 108.80. Demand for safe-haven assets eased despite persistent tensions between the US and China.


Gold looks to close week with small gains below $1,470

The precious metal struggled to find demand on Friday as the upbeat market mood on renewed hopes of the United States and China reaching a trade deal to avoid a tariff hike in December caused investors to move away from safe havens.

Gold News

Crypto Today: Playing with the thin red line

BTC/USD has fallen below $8,500 during the Asian trading session. A close below this support level would put $7,500 on the trading table. ETH/USD is moving below the 50-period exponential moving average.

Read more