The Swedish krona weakened and Swedish interest rates fell after the announcement from the Riksbank on Tuesday morning where the repo rate and obligationsköpen, as expected, was left unchanged, but the ”sänkningsbias” that previously existed was removed.
The repo-rate path was increased in the short term and indicates now a bottom on -0,50% in the third quarter of this year to the second quarter of 2018. The first increase is expected in mid-2018, as in the previous assessment.
The riksbank was unanimous in the decisions. Nine of the ten raters in the SME Direkt poll had expected to räntebotten would be on -0,50%, up from the previous -0,53%.
”Inflation in recent times has become a bit higher than expected and the risk of setbacks in the world is estimated to have declined, now makes it somewhat less likely than before that the Riksbank lowers the repo rate in the coming period,” writes the Riksbank.
The riksbank notes that CPIF inflation has been rising and has varied between 1.5 and 2 percent in the last half of the year. But it has taken time to get inflation up and it has taken a lot of support of monetary policy.
”Inflation has been lower than the inflation target over a long period of time means that there is a risk that inflation expectations are more sensitive than usual to negative surprises. Against this background, it is particularly important that the inflation rate more long-term is close to the inflation target. A prerequisite for this to happen is that the economy continues to be strong and to gradually put larger footprint in price,” writes the Riksbank.
The riksbank also writes that the board, as in the past, is ready to take further monetary easing if needed to stabilise inflation and to defend the inflation target.
The forecast for wages and salaries was revised once again down and the Riksbank track now increases of 2.7 per cent in the year (2.8% in april), 3.0 per cent in the next year (3,1) and 3.2 per cent in 2018 (3,2).
The riksbank writes that the wage agreements so far signed have followed the industriavtalets brand with a range of 6.5 per cent.
”The central contracts is an indication that the rate of wage increases will be subdued in the next few years, in relation to the strong domestic economy,” writes the Riksbank.
GDP forecast revised down to +2.2% in the year (+2,8 in april), but up slightly for the year 2018 to +2.4% (+2,3). CPIF forecast is unchanged at 1.8 per cent in the year, but is lowered slightly to 1.7 per cent next year (1.8 in).
Andreas Skogelid at Handelsbanken writes in a comment to the minimum bid rate that it was in line with expectations.
He notes the downward revision of the wage forecast and says that it may indicate a lower domestic inflationary pressure.
Handelsbanken continues to believe in a first rate hike in april 2018, and to tillgångsköpprogrammet is not extended beyond 2017.
Swedbank writes that the decision was ”absolutely according to our prognosbild, maybe something about the soft side”.
SEB noted that the Riksbank, as expected, follows the Norges Bank and the ECB and remove nedåtbiasen, but that they also are ready to do more if the inflation would surprise on the downside.
”But we believe that the shift to a neutral stance, and the slightly more hawkish signals from the ECB supports our view that the Riksbank will deliver a first increase in april 2018, slightly sooner than indicated by the Riksbank,” writes SEB.
The crown has lost around 5 penny against the dollar to 8:52 and 4 penny against the euro at 9:67.
The interest rate on the Swedish ten-have dropped 3 basis points to 0.62 percent.
The japanese yen strengthened during the morning after the news that north Korea has postponed an intercontinental ballistic missile.
President of the united states Donald Trump asked earlier on Twitter if ”this guy” (north Korean leader Kim Jong-Un) doesn’t have anything better to do with his life.
”It is hard to believe that south Korea and Japan will put up with this for very long. Maybe China will act hard against north Korea and put an end to this nonsense once and for all!”, tweeted Donald Trump.
South Korean president Moon Jae-in condemned the earlier the north Korean launch and stated that south Korea and the united states analyze if it was an intercontinental ballistic missile, i.e. a robot that could fly, for example, from north Korea to the united states. If it would be such a robot will south Korea to prepare measures, it was.
Later on Tuesday called on China to ”calm and restraint” and Geng Shuang, a spokesperson for China’s ministry of foreign affairs, said that the UN security council has a clear set of rules for north korea’s missile and that China believes that the action is now in breach of these rules.
The development of the dollar/yen turned in the morning after a minimum of have been traded just under 112:80.
The euro has during the morning lost to 1:1350 to the dollar, from 1:1370 at american trading on Monday.
The united states are closed on Tuesday for the celebration of Independence Day.
Tradingportalen/Agency Directly.
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