Nordea have gone long EUR/SEK with a.......>

EURO-SEK: Nordea have gone long EUR/SEK with a target of SEK10.92 and a stop

loss at SEK10.61. Nordea suggest that "one reason why EUR/SEK remained bid over

last week could be the imminent restart of the Riksbank bond purchase program

over the coming weeks. The off'l restart of purchases is Aug 1, but it seems as

if the Riksbank has postponed the restart another week compared to '18. Last

year the Riksbank restarted purchases at the reverse auction Aug 9, but this

year there is no reverse auction on Aug 8, otherwise the Riksbank would have

announced it here. The good old Riksbank is a tricky one to forecast. If we

assume that the Riksbank will continue to squeeze out foreign holders of SGBs at

the same pace as in 2017-2018, then EUR/SEK levels ~SEK11 could come into play.

The Riksbank already holds a material part of the shorter end of the curve (>

50% of all outstanding bonds through SGB 1059 Nov 26). The Riksbank has no

formal "cap" on ownership in % of outstanding, but it seems inevitable that they

will be forced further out the curve or even forced into buying SSAs or Covereds

at some point. In general, we think it may make sense to continue betting on a

more dovish Riksbank than what is priced by mkts."