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Nordea Recommend Long NOK/SEK

SCANDIS

The weekend saw Nordea recommend going long NOK/SEK with a target of SEK1.0225 and a stop loss at SEK0.9560 (remaining clearly bearish on USD vs. both Scandi currencies). They note that "the NOK has celebrated the combo of a Brexit deal, OPEC+ prudency and the Georgia Blue Sweep. On top of this, NOK structural liquidity will remain very tight during Q1, also according to the new forecast from Norges Bank. It looks like we could still be facing a liquidity squeeze between mid-February and early July unless Norges Bank decides to offer new 3m F-loans when the current loans mature in February. We are yet to see any hints of such new loans yet, which could mean higher NIBOR/OIS and a decent NOK environment due to tight liquidity. Long NOK/SEK positions are accordingly starting to look attractive to enter. EUR/SEK bearish strategies could on the other hand start to lose a bit of momentum should the Riksbank ponder cutting into the rebound as at least 1 or 2 of the board members have warned us of."

MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com
MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com

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