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Disinflation driving monetary divergence - SocGen

FXStreet (Bali) - Disinflation is driving monetary divergence, notes Societe Generale, reaffirming its conviction on the basket of long USD-GBP-NOK versus short EUR-NOK-CHF.

Key Quotes

"Disinflation haunts global markets, with the Riksbank becoming the latest t becoming the latest t becoming the latest to exhaust o exhaust conventional policy tools."

"The next step, if necessary, will be a currency depreciation strategy, either directly à la Suisseor indirectly or indirectly à la Japonaise à la Japonaise."

"When nominal interest rates are at the zero bound, one of the few monetary tools left is the exchange rate. y tools left is the exchange rate. More than growth, disinflation is driving monetary policy divergence across the G10."

"We reaffirm the monetary divergence basket of long USD-GBP-NOK versus short EUR NOK CHF and see continued pressure to sell EUR/USD based on tic level analysis. d on tic level analysis."

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