{"id":9652,"date":"2015-07-02T07:30:12","date_gmt":"2015-07-02T12:30:12","guid":{"rendered":"http:\/\/olduvai.ca\/?p=9652"},"modified":"2015-07-02T07:30:12","modified_gmt":"2015-07-02T12:30:12","slug":"with-swedens-qe-officially-broken-the-riksbank-doubles-down-lowers-rates-even-more-negative-boosts-qe","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=9652","title":{"rendered":"With Sweden’s QE Officially Broken, The Riksbank Doubles Down: Lowers Rates Even More Negative; Boosts QE"},"content":{"rendered":"

With Sweden’s QE Officially Broken, The Riksbank Doubles Down: Lowers Rates Even More Negative; Boosts QE<\/a><\/h3>\n

It was precisely\u00a0one week ago\u00a0<\/a>when we described how, for the first time in history, QE had officially failed to achieve its stated objective of pushing yields lower (ignoring that the real purpose is to push stock prices higher). In fact, it the outcome was precisely the opposite because as a result of the ongoing QE by Sweden’s Riksbank, and not enough collateral, the “soaking up” of eligible debt made the market so illiquid, buyers were unwilling to touch the bonds until yields rose enough to offset the liquidity risk.<\/p>\n

\"\"<\/a><\/p>\n

As Danske Bank explained: \u201cSwedish rates continue to trade strong relative to Germany because of a lack of material in the repo market as a result of the Riksbank\u2019s QE program<\/strong>.\u201d<\/p>\n

We added that the Riksbank targets about $10 billion in government bond purchases as it tries to revive consumer-price growth after months of deflation.\u00a0That\u2019s about 14 percent of the market or 3 percent of Sweden\u2019s gross domestic product.<\/strong><\/p>\n

And the punchline: “any efforts to expand asset purchases would deplete Sweden\u2019s already limited sovereign debt supply<\/strong>“, SEB AB and Danske Bank have said.<\/p>\n

This also came just days ahead of the latest BIS semiannual report in which it blasted central banks for engaging in wanton, endless QE which has pushed stocks to all time highs only at the expense of bond market liquidity.<\/p>\n

So what did the Swedish central bank do? Overnight the Riksbank confirmed that it neither learns from its own mistakes, nor reads BIS reports when at 9:30 CET, it shocked central bank watcher all of whom were expecting no rate change from the bank,\u00a0and announced it is not only engaging in yet another rate cut, taking the key rate even further into record NIRP territory, from -0.25% to -0.35%…<\/strong><\/p>\n

 <\/p>\n

…click on the above link to read the rest of the article…<\/p>\n","protected":false},"excerpt":{"rendered":"

With Sweden’s QE Officially Broken, The Riksbank Doubles Down: Lowers Rates Even More Negative; Boosts QE It was precisely\u00a0one week ago\u00a0when we described how, for the first time in history, QE had officially failed to achieve its stated objective of pushing yields lower (ignoring that the real purpose is to push stock prices higher). In […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[1269,1719,124,6933,359,1167,4549,534,661,662,6934,741,4318],"class_list":["post-9652","post","type-post","status-publish","format-standard","hentry","category-economics","tag-bis","tag-bond","tag-central-banks","tag-danske-bank","tag-germany","tag-greece","tag-gross-domestic-product","tag-monetary-policy","tag-qe","tag-quantitative-easing","tag-repo-market","tag-sovereign-debt","tag-zerohedge"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/9652","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=9652"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/9652\/revisions"}],"predecessor-version":[{"id":9653,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/9652\/revisions\/9653"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=9652"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=9652"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=9652"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}