Short EUR/SEK for target of 9.12 – Deutsche Bank

Sandeep Kanihama FXStreet Contributor

The analysis team at Deutsche Bank is recommending to go short on the EUR/SEK cross with the following parameters:

“Target 9.12, entry 9.5442, stop 9.70”

Key Quotes

“Last week's strong inﬂation print may have been the ﬁnal catalyst for the Riksbank to turn outright hawkish in coming months. Three consecutive inﬂation prints above Riksbank projections suggest the labour market is tightening faster than the Riksbank expected, consistent with soaring vacancy rates and anecdotal reports of growing labour shortages. With the OIS curve pricing a 50% chance of a ﬁrst hike in April 2018, the market in our view still underprices a prospective hawkish turn by the September meeting, signalling greater tolerance for krone strength and a ﬁrst hike in 1H 2018. Net positioning in SEK is still light, and EUR/SEK is trading rich to the bund spread even before a Riksbank repricing.”

Author

Sandeep Kanihama

FXStreet Contributor

Sandeep Kanihama is an FX Editor and Analyst with FXstreet having principally focus area on Asia and European markets with commodity, currency and equities coverage. He is stationed in the Indian capital city of Delhi.

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