Fade the Scandie weakness, NOK in particular - Nomura
Analysts at Nomura suggest that while they do not expect a hawkish turn from the Riksbank at the December meeting, the move they have seen recently has gone beyond where fundamentals would suggest and as a result, they think EUR/SEK should drift lower in the coming weeks from current levels around 9.93.
“It will take time for housing market fears to recede, and the prospect of a dovish Riksbank in December limits the extent to which SEK can appreciate into December. Nonetheless, for medium-term investors, short EUR/SEK positions look appealing.”
“NOK has been a victim of the Swedish housing market concerns. We maintain our view that NOK should appreciate in the coming months on the back of an improving inflation outlook and bottoming housing market. Short EUR/NOK positions look very attractive at these levels of 9.68. From a relative value perspective, we continue to see NOK/SEK upside towards the 1.05 level.”