28 Apr 2015
Short NOK/SEK into Riksbank meeting – TDS
FXStreet (Barcelona) - Richard Kelly, Head of Global Strategy at TD Securities, expects Riksbank to shift to a hawkish tone by leaving rates unchanged and extend its QE, and maintains a short bias on NOK/SEK.
Key Quotes
“Coupled with the recent strength in oil, expectation of some kind of easing at tomorrow’s Riksbank meeting, and hawkish comments yesterday from Norges Bank Governor Olsen, NOKSEK is testing the February highs, with EURSEK also at the April highs as it so far lingers just below the 100dma.”
“Our call for the Riksbank tomorrow to leave rates unchanged and extend QE is likely to be taken as hawkish, and would leave us biased to be short NOKSEK.”
“But even an on consensus easing in rates from the Riksbank may now extend the technical move higher, but even this isn’t clear with almost half of consensus looking for 15-25bps of easing versus the consensus for a 10bp cut, so this does offer some opportunity for volatility in what is likely to be an otherwise range-bound market into the FOMC decision on Wednesday.”
Key Quotes
“Coupled with the recent strength in oil, expectation of some kind of easing at tomorrow’s Riksbank meeting, and hawkish comments yesterday from Norges Bank Governor Olsen, NOKSEK is testing the February highs, with EURSEK also at the April highs as it so far lingers just below the 100dma.”
“Our call for the Riksbank tomorrow to leave rates unchanged and extend QE is likely to be taken as hawkish, and would leave us biased to be short NOKSEK.”
“But even an on consensus easing in rates from the Riksbank may now extend the technical move higher, but even this isn’t clear with almost half of consensus looking for 15-25bps of easing versus the consensus for a 10bp cut, so this does offer some opportunity for volatility in what is likely to be an otherwise range-bound market into the FOMC decision on Wednesday.”