Market talk
The sell-off that started in the US has been supported by positive macro developments in other parts of the world. Still, central banks are likely to retain a dovish stance, while it will be increasingly difficult to meet the constantly rising expectations.
USD strategy
The sell-off has finally shown signs of easing, as some economic data releases have disappointed and geopolitical risks have boosted bonds. The risk picture clearly supports positioning for a move lower in rates.
EUR strategy
We expect a dovish Draghi next week and look at flattening front-end EONIAs as current sell-off may have pushed rates too high.
NOK strategy
The market is most likely not prepared for a major upward revision of the rate path by Norges Bank, which we think will come on September 19.
SEK strategy
Swedish data has printed on the strong side during the summer, changing the perception of the Riksbank. This has removed the market´s pricing of further rate cuts, and we find value in front-end flatteners.
Read the full report: FX Strategy
Nordea