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Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
SEK
Bearish conditions for USDSEK have been affirmed by the 1.8% decline over the past two sessions, with the 50-day EMA continuing to cap the price action well. Spot hovers just above key pivot support around 10.1500, which was last tested in late-August and has proved a significant inflection point across the past 2 years (see chart).
- US developments are set to remain dominant next week and Danske Bank currently view the Fed decision as SEK neutral, assuming a 25bp cut is delivered. However, they outline two scenarios in the event of a surprise 50bp cut:
- “Either 1) it is seen as a gift to the equity market that Fed cuts that much despite a still solid economy, supporting the SEK through both the rates and risk-channels, or 2) markets start to fear that the Fed knows something they don’t, yielding a risk-off impulse that instead hurts the SEK”.
- Scenario (1) would put 10.1500 firmly into view, a breach of which would expose support at 9.9100 (the December ’23 low). Alternatively, the 50-day EMA would provide initial resistance should Scenario (2) prevail.
- Next week’s Swedish calendar includes the August labour force survey. However, this is unlikely to move the needle ahead of the Riksbank’s Sep 25 decision, with a 25bp cut well priced at this stage.
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
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