Nordic Tag-Team in Play
The Federal Reserve aside, most central banks in G10 were general cautious in June, none more so than Norges Bank. The central bank confounded market expectations (and in hindsight, positioning) with a surprisingly bearish assessment and NOK ended the month losing ground against every G10 currency bar the Australian dollar. This kind of rate-neutral ‘stimulus’ is sorely needed for economies grappling with higher household debt and strong currencies, and Wednesday represents the Riksbank’s turn to follow suit. With EURSEK having touched 12-month highs of late, the Riksbank clearly has more room for manoeuvre, but the market should continue to expect an abundance of caution.
Read the full report: UBS