Market movers today
The main event today is the Riksbank's monetary policy announcement in Sweden. There is a great deal of uncertainty related to this meeting as we're set to get information about the the asset purchase programme (QE) going forward. Purchases started in February 2015 and by now the total holding of nominal bonds is around 45% of the stock (less in IL-bonds). In the meantime, inflation has risen and the scarcity of bonds has increased too. This is why we expect them to announce an end to QE, even though we admit it is a very close call. However, even so, purchases are unlikely to come to a standstill because of reinvestments and redemptions. We also expect the Riksbank's rate path to remain unchanged, i.e. with the first rate hikes by late next summer. However, the 'risk' is that the first hike is delayed to avoid sending an unwarranted hawkish signal. Furthermore, in Sweden, the monthly NIER business and consumer confidence data is due. The thing to monitor here is if and to what extent recent nervousness about housing has affected consumers.
In the early hours of Thursday morning, the Bank of Japan (BoJ) will end its monetary policy meeting. We expect the BoJ to keep its 'QQE with yield curve control' policy unchanged but we will be listening closely to the communication from Governor Haruhiko Kuroda during the press conference, as he might elaborate on recent tightening speculation. See our Bank of Japan Preview: Things just got interesting, but still too early for tightening discussions , 19 December.
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