Krona price action needs to move beyond a simple rate story
With or without the approval of their neighbours, Norges Bank probably did their counterparts in Stockholm a favour in helping condition market expectations for the July Riksbank interest rate decision. Oslo deemed interest rate expectations for key trading partners as the biggest factor behind their stronger dovish bias, and noted ‘market expectations point to further rate cuts by Sveriges Riksbank’. EURSEK and EURNOK have both made solid gains since the Norges meeting date, but we think markets should not get too fixated on Nordic rate dynamics, particularly in Sweden.
Read the full report: UBS