Morgan Stanley entered a short EUR/SEK.....>

EURO-SEK: Morgan Stanley entered a short EUR/SEK position at the NY close on

Thursday with a target of SEK10.1500 and a stop at SEK10.8700.

- MS reason that "SEK should receive support from both domestic and global

factors. The Riksbank being more hawkish than expected, keeping its forward

guidance unchanged for a rate hike towards the end of 2019 or early 2020, stands

against the trend of global central banks - including the ECB - easing policy.

This should push yield differentials in support of lower EUR/SEK. ECB President

nominee Lagarde calling for Euro area fiscal expansion may reduce the need for

significant monetary easing. Coupled with the ECB potentially unveiling a

smaller-than-expected easing package next week, this should work in favor of

lower EUR/SEK as markets may read across to the Riksbank having more space to

hike rates. Globally, the temporary calm in trade tensions and China signaling

more monetary and fiscal stimulus may also increase market optimism on global

growth prospects, which benefits small and open economies like Sweden

disproportionately more. The key risk to this trade is a significant sell-off in

risk appetite."