Nordea Recommend Adding USD/SEK Longs

Nordea are "generally more tempted to remove reflationary bets from the table than adding new ones, and opt to add USD/SEK longs to the mix ahead of the Swedish dividend season (target SEK8.96, stop loss SEK8.42). The SEK still faces a more problematic flow environment than usual over the next several weeks due to the upcoming mega dividend season. According to our estimates, the OMXS30 index will pay out more than twice the amount seen in 2020, if the dividends are not reinvested into SEK the payout season may cause SEK selling. The dividend season begins in earnest in early April. Aside from the dividend season there are few interesting domestic drivers for the SEK currently in our view. One might also ask if market participants should not be paying more attention to the relative inflation outlook between the U.S. and Sweden. Sweden's core inflation is likely to come crashing down below 0.5% (according to the Riksbank's estimates), while we see plenty of upside risks to U.S. core inflation. Gauging the relative inflation outlook, USD/SEK should be trading above SEK9.50 later this year. We favour buying EUR/SEK (& USD/SEK) on dips."