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SCANDIS: NOKSEK 0.8% Lower As Israeli/Hezbollah Ceasefire Reports Weigh On Oil

SCANDIS
CEEMEABulletSwedenNorwayMarketsForeign Exchange Bullets

NOK has come under renewed pressures as reports of an Israeli/Hezbollah ceasefire deal drags crude prices lower. 

  • NOKSEK is now 0.8% lower today at ~0.9900, after failing to breach parity last week. The latest pullback is considered corrective, and has allowed an overbought condition to unwind. Key support is the 20-day EMA at 0.9851.
  • Although a less stretched technical set-up may provide better conditions for another test of parity in the medium-term, oil price movements will likely be a key source of volatility in the short-term.
  • This week’s Scandinavian calendar is headlined by Swedish data/speakers. We are most interested in the November Economic Tendency Indicator (Thursday) and Q3 GDP (Friday). The (often unreliable) flash GDP release was weaker-than-expected at -0.1% Q/Q, but SEB and Danske Bank expect an upward revision. If this materializes, it may provide an additional headwind to NOKSEK.
  • Meanwhile, Riksbank Deputy Governor Seim will deliver a speech on the neutral rate tomorrow at 0730GMT/0830CET. The September MPR provided an initial estimate of neutral of around 2.25%, but we have been promised a more comprehensive analysis in the December MPR. Seim’s speech should update markets on the Riksbank’s current thinking. 
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NOK has come under renewed pressures as reports of an Israeli/Hezbollah ceasefire deal drags crude prices lower. 

  • NOKSEK is now 0.8% lower today at ~0.9900, after failing to breach parity last week. The latest pullback is considered corrective, and has allowed an overbought condition to unwind. Key support is the 20-day EMA at 0.9851.
  • Although a less stretched technical set-up may provide better conditions for another test of parity in the medium-term, oil price movements will likely be a key source of volatility in the short-term.
  • This week’s Scandinavian calendar is headlined by Swedish data/speakers. We are most interested in the November Economic Tendency Indicator (Thursday) and Q3 GDP (Friday). The (often unreliable) flash GDP release was weaker-than-expected at -0.1% Q/Q, but SEB and Danske Bank expect an upward revision. If this materializes, it may provide an additional headwind to NOKSEK.
  • Meanwhile, Riksbank Deputy Governor Seim will deliver a speech on the neutral rate tomorrow at 0730GMT/0830CET. The September MPR provided an initial estimate of neutral of around 2.25%, but we have been promised a more comprehensive analysis in the December MPR. Seim’s speech should update markets on the Riksbank’s current thinking.