NOK, SEK remain vigilant on ECB – TDS

Strategists at TD Securities noted the relevance of the next ECB policies for both NOK and SEK.

Key Quotes

“The Scandinavian central banks largely have their hands tied as they wait for the ECB’s recalibration announcement. With underlying inflation trends looking better in Sweden, we expect a gradually growing level of comfort with some SEK appreciation, but the timing of rate hikes will be limited by fears of too much policy divergence with the ECB. As Oslo housing continues to fall, we may see growing concern from the Norges Bank”.

“Both Norges and Riksbank remain dovish and this is likely to remain unchanged. Of the two we currently favour NOKSEK higher as we see most of the good news priced in for SEK and the bad for NOK. Both should remain relatively rangebound against the EUR, however, as policymakers in Sweden and Norway will stay firmly behind the ECB's parapet”.