The downward pressure on global rates and yields intensified after the British people's decision to leave the EU. As flagged in the Brexit - policy responses and market implications , 24. June, we are expecting the UK 'Leave' vote to weigh on European growth and imply that global yields will be 'low for even longer'.
We expect the BoE to cut the Bank Rate down from 0.50% to 0.00% and to resume the Asset Purchase Facility (APF), which we anticipate will be expanded in the range GBP150-200bn.
We expect the ECB to temporarily step-up the QE purchases to EUR100bn per month for the rest of the year.
Our main scenario is that the Fed is on hold for the next 12m and the next hike will be in June 2017 and the following in December 2017.
We expect Danmarks Nationalbank to keep its key policy rate unchanged at minus 0.65%.
We expect Norges Bank to cut rates by 25bp in September and likely again in December to 0%.
In Sweden we expect an extension of the QE programme and that it will be announced in H2 16.
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