The Minutes from Riksbank’s September Meeting

The Minutes from Riksbank’s September Meeting

The Minutes from Riksbank’s September Meeting

The last Riksbank meeting was held on 6-7 Sep and led to no changes in monetary policy parameters. It did however result in more upbeat GDP projection and slightly higher CPI and implied rates paths (the latter is calculated from the Bank’s model, it is not the projection of members’ preferences like the Fed dot chart)

Minutes from this meeting were published in the morning. The document says that the economy is well equipped to show better performance but there are still many downside risks, mainly external, but SEK is also counted as one of them.

The document, unlike the one form Fed reports individual opinions of policymakers:

  •          Floden: the decision not to change anything was pretty much obvious, the expectations that CPI will rebound based on shaky arguments, next steps of Riksbank should be small, exploratory

 

  •          Jansson: we need to carefully watch CPI, there is less reason for SEK gains now

 

  •          Ingves: rates need to stay low to secure the CPI target, but are causing risks of too much debt and to housing market; slow pace of appreciation of SEK is highly important now, Krona will be central variable in monetary policy

 

  •          Jochnick: policy needs to stay accommodative for many years

 

  •          SEK is generally getting softer after the release, which has many items pointing to cautiousness in running monetary policy and disbelief in Riksbank’s own CPI projection. The voice of the chairman stressing risks of low rate environment is little heard due to the number of other comments released at the same time.

EURSEK looks interesting when placed on top of an inverted DE30 index. There is a divergence after days of smooth co-movement of the two. We are still waiting for a major market-moving event today (Fed) so this picture can look different soon.

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