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Forex Flash: Riksbank rate cut unlikely despite clear easing bias – TD Securities

FXstreet.com (Barcelona) - The Riksbank decided to leave the repo rate on hold at 1.00% today, “as unanimously expected, but struck a decidedly dovish tone via its repo rate forecasts, pushing the first rate hike back by nearly a year from what had been estimated previously”, said analyst Marcin Budkiewicz, pointing to the new CPI forecasts as the driving factor, which see inflation taking even longer to return to the Riksbank’s 2% target. “While the Riksbank did still maintain a clear easing bias, we think that an actual rate cut is unlikely unless we see much weaker foreign demand than what is currently anticipated”, continued the TD Securities analysts, noting that the central bank is still worried about financial imbalances. Also, brighter prospects for the Swedish economy, together with low interest rates, have contributed to an increase in housing prices, and this is expected to continue and to contribute to a faster increase in household debt in the coming period than was forecast earlier.

European markets fall for the fourth day in a row

The German DAX 30 (-1.38%), the French CAC 40 (-1.07%), the Italian FTSE MIB (-0.76%) and the Spanish IBEX 35 (-1.00%) are edging lower once again this week, the fourth day in a row. Most European equity indexes are joining the mood. Futures for the American S&P 500, Nasdaq 100 and Dow Jones are signaling a lower opening between -0.45% and -0.65% ahead of speeches in the US, by Fed’s Bullard and Rosengren, as well as Treasury Secretary Lew later.
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Forex Flash: Are markets pricing in global disinflation? – UBS

The recent gyrations in commodity markets are likely an over-reaction to idiosyncratic factors in the gold market. However, “there is a risk that markets are now pricing in global disinflation coupled with policy futility. Although the Canadian dollar is not a commodity bloc currency in the strictest sense as its energy exports only represent a minority of total exports, falling commodity prices is still something Canada can do without in an environment where demand for discretionary exports is already waning.” notes Research Analyst Gareth Berry at UBS.
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