Sweden's National Debt Office (SNDO) will release its new forecast for the net borrowing requirements for the remainder of 2016 and 2017 on Wednesday, 26th October.
Since the previous report in June tax revenues has been around 12 bn higher than forecast. In the August turn-out of the borrowing need, the Debt Office said that it believed that most of the higher-than-expected tax revenues in July and August had their origin in supplementary taxes for this year rather than the previous year.
"We expect the SNDO to reduce its financial plans for government bond borrowing by SEK17bn to SEK60bn. A borrowing adjustment of that magnitude could have a major impact on a bond market that has already begun to show signs of supply shortages," said Danske Bank in a report.
Analysts beleives the revision of the borrowing need is enough to reduce auction size in nominal bonds from 3.5 to 3 bn / auction. A dramatic cut in net issuance might eventually be an issue for the Riksbank too, as the supply of assets to purchase in its QE programme would probably decrease further.


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