The Weekly Brief (02 November 2015)Contributor Global Markets Insights Strategy Team
Last week was central bank week – the US Fed, the Bank of Japan, and the oldest central bank in the world: the Sveriges Riksbank. On Wednesday, Sweden’s central bank left rates unchanged but added more (from SEK 135bn to SEK 200bn) to its quantitative easing (QE) programme.
The extra six months of purchases will run from January to June 2016. While central banks often see their currency depreciate after an easing announcement, the Swedish krona actually rose versus its major peers. Perhaps because policy makers didn’t increase the probability of a rate cut by year-end and inflation in the country is actually starting to come through. Bond markets did react in the expected way: 2-year bond yields in Sweden, France, Finland and Belgium fell during the week. The era of unconventional monetary policy continues.
Riksbank policy rate and Swedish krona
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