Short NOK/SEK: CPI Numbers Likely to Cause SEK to Outperform - Nomura
Research Team at Nomura, suggests that the Norges Bank meeting and
Swedish CPI data released this week present an opportunity for an RV
“We expect Norges Bank to remain on hold this week, but for communications to remain on the dovish side. The data continue to point towards a cut in H2. Because market expectations of a Norges Bank easing have declined recently, the statement could be slightly more dovish than expectations.
Inflation numbers for both Norway and Sweden are published this week. The Norway number is unlikely to be a big market mover as the high Norwegian inflation story is well known. In Sweden, inflation is recovering and the skew of estimates in a Bloomberg survey show the possibility for an upside surprise and typically has been a more sensitive market number of the two.
Oil remains quite closely correlated with NOK/SEK, but the Canadian wildfire story is already known to the market and the Saudi news over the weekend too. So any surprises in oil markets this week from the inventory and rig count data should be watched out for.
Short NOK/SEK at 0.9930 with a target of 0.97 and stop at 1.01.”