Riksbank’s QE likely in September

Riksbank's QE will speed up after the summer holidays, and it is massively larger than ECB's relative market size. By end of August Riksbank will have bought more than 14 % of the stock while ECB's number is less than 4%, foresees Nordea Bank. The 5y government benchmark (SGB 1047) trades close to -60 bps in the repo market, and could get richer as more and more of the outstanding stock is being swallowed. 

At the same time, currency flows in DKK has reversed and Denmark's central bank is expected to restart government bond issuance soon as a first step before increasing policy rates. Being long Sweden versus Denmark in 5s is a trade that make sense and that has central bank support in both legs. Alternative, one could consider paying in 5y Eonia swaps as a way to hedge a long position in SGBs.