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ECB easing will likely cause the Riksbank to cut

ECB's meeting this week brings in wide expectations on a rate cut and extension of its QE programme, which will ultimately effect smaller European currencies like the SEK, NOK and CHF.

"In Sweden, we continue to think that imminent ECB easing will likely cause the Riksbank to cut its repo rate by 10bp, with risks for a deeper cut should the ECB exceed market expectations", says Barclays in a research note. 

The market expectations on the Riksbank's December meeting have moved appropriately, however there are near term upside risks to EUR/SEK. Despite the Riksbank's reactivity, a solid domestic outlook is likely. 

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