EUR/NOK, EUR/SEK still appear cheap – Danske Bank

Arne Rasmussen, Chief Analyst at Danske Bank, noted the prospects for both crosses in the next periods.

Key Quotes

“In Norway, yesterday’s construction data alongside Monday’s manufacturing release means that the potential for a significant negative GDP surprise tomorrow has diminished – even if we still look for a below consensus (and Norges Bank projection) print”.

“The recent turn in political events in France has weighed on the broad EUR, yet the move higher in EUR/SEK and EUR/NOK highlight our expectation last week that the SEK- and NOK- rallies were about to lose momentum”.

“Also, US supply side focus has weighed on the oil price, aiding EUR/NOK higher”.

“Both EUR/NOK and EUR/SEK still seem cheap according to our short-term financial models. Historically, these spot-model deviations have been reliable indicators for corrections”.

“In summary, strategically we like to be short EUR/SEK and EUR/NOK but tactically we prefer to stay side-lined and look for better entry levels”.