SEK: Ingves’ term extension no game changer – Nomura

Analysts at Nomura note that on Friday it was announced that Governor Ingves will continue for another five years as Riksbank Governor, having already served a 12-year term since January 2006.

Key Quotes

“EUR/SEK rallied towards 9.66 on the announcement, as expectations of a possibly more hawkish governor being appointed were removed. Near-term SEK appreciation may be slower, but we do not view this as a game changer for SEK.”

“We do not think the extension of Governor Ingves’ term is a game changer for SEK. The market’s pricing for Riksbank normalisation is not hugely at odds with the Riksbank’s own forecasts, particularly on policy expectations on a two-year horizon. As a result, a continuation of Mr. Ingves’ term as Governor (consistent with current forecasts) should not be a significant shock to the market. We believe arguments for SEK outperformance remain intact.”