Free Trial

JPM Re-Enter Short GBP/USD View, Initiate Long USD/NOK

FOREX
  • On GBP, they write that dovish elements stand out from the BoE decision, with 75bps hikes not the base case for future meetings. This argues the case for further divergence between the US and BoE. They add that cable is high beta cyclical G10 currency and has relevant event risk to come, including the revised OBR date on Nov 17.
  • On NOK, they write that Norges Bank have bought into the Fed pivot narrative and NOK screens modestly rich vs EUR when adjusted for rate differentials and energy prices. A long USD/NOK trade plays both JPM’s bearish EUR/USD view and NOK weakness appears most appropriate. Additionally, NOK’s carry profile is weak in light of its high beta status, with a USDNOK long providing positive carry and a defensive position to a global growth slowdown. This may be compounded by seasonal headwinds, with November the strongest month for USDNOK.
MNI London Bureau | +44 203-865-3809 | edward.hardy@marketnews.com
MNI London Bureau | +44 203-865-3809 | edward.hardy@marketnews.com

To read the full story

Close

Why MNI

MNI is the leading provider

of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.

Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.