Danske's Musings On Today's Local Event Risk

Danske Bank note that "for NOK, today's Norges Bank meeting is in focus but it may in fact not provide many new signals. This might initially disappoint markets where, over the past week, notably Norwegian swap rates have been moving higher and EUR/NOK briefly traded below NOK10.50. However, any market reaction is likely to be limited given that it is an interim meeting, and the market will soon start to look forward to the September gathering. We keep our view that EUR/NOK has more downside on a 1-3M horizon, targeting SEK10.40. For SEK, today's speech by the Riksbank's (RB) Skingsley will be crucial as it is the first RB appearance since the July meeting. While the SEK appreciation has been much heftier than its forecast, the RB can take comfort in higher-than-expected inflation numbers. At this point, such factors may well be seen cancelling out. If krona appreciation worries are surfaced it should lend support to EUR/SEK, whereas benign neglect could pull the cross lower."