Nordea suggest that "the experience of..........>

SEK: Nordea suggest that "the experience of EUR/SEK ahead of the past 4 Riksbank

hiking cycles implies a drop to SEK10.20-10.25 by Dec 20. We continue to advise

caution, as there are many headwinds for the SEK in this mkt. The mkt may become

more illiquid as year-end approaches. A Riksbank hike is already well priced-in.

The Riksbank is still expanding its balance sheet into Feb 2019. Year-end

effects are likely to depress Stibor rates further. Swedish & global macro risks

lie predominantly on the downside & Sweden still lacks a new gov't which means

an expansionary budget is becoming less likely by the day. None of this seems

concordant with significant underperformance of SGBs, which may be what's needed

to change the game for the SEK. Moreover, recent USD gains could suggest latent

upside pressure on EUR/SEK e.g. local institutions might need to buy USD/SEK for

hedge rebalancing reasons. Local interest to go against any SEK weakness may

also be limited next week due to a week-long autumn break. With a strong USD and

a Swedish holiday coming up, we opt to go long EUR/SEK."