EQUITIES: A new 26yrs high for the European Tech Sector

Fresh downside for EURNOK this morning, with the cross now 0.5% lower at 10.9275 and notably piercing support at the March 19 low of 10.9354. A clear break would strengthen a bearish theme, and expose the next support zone around 10.80 (see chart).  

• Rate spreads look to be lending some support to the krone here, with front-end FRA rates up to 6bps higher this morning – more aggressive than both EUR and SEK peers.
• Although energy prices are little changed on the session, current levels are still sufficiently high to provide a positive terms of trade impulse to Norway’s current account surplus.
• We've previously noted that the current backdrop appears favourable for the krone, drawing on the strong recovery in risk assets, still-elevated oil prices and hawkish domestic impulses for Norges Bank to consider.
• Unless incoming labour market data shows material weakness, we think Norges Bank is likely to hike rates in May – the foundations were laid for such a move in the March guidance. 

Figure 1: EURNOK Since 2022 (Source: Bloomberg Finance L.P)

ERM6 97.87/97.93cs, bought for 1.25 in 20k.

• ERK6 97.62/97.75/97.870c fly, bought for 4.75 in 4k.
• ERU6 97.68/97.81 cs x2 vs 97.31p x1, bought the cs for -2.5 in 5k (10k x 5k).
• ERZ6 97.62/97.75/97.875/98.0625c condor, bought for 2.5 in 8k.