NOK: Danske Bank Recommend Long EURNOK As Summer Headwinds Fade

JP Morgan continues to recommend short GBPCHF "into what could be a dovish BoE on Thursday and given the constrained SNB and expected global growth slowdown in H2-25" in a note released yesterday evening:

• "The CHF reaction to US imposed tariffs on Switzerland shouldn’t be as bad as feared given product exemptions, company mitigations, potential for negotiations and other factors"
• "Corporate preparation for tariffs also limits the impact on CHF [...] there is some element of the market assuming ample room for these tariff rates to be negotiated down, which limits the initial currency response."
• "A risk scenario for CHF would be if global growth surprises to the upside and accelerates at the same time as Switzerland struggles with domestic growth woes from being singled out on tariffs, but our economists are still looking for a H2-25 global growth slowdown [...] The growth hit to Switzerland, if tariffs are sustained, would imply a significant headache for the SNB, which has been hesitant to cut into negative territory and is likely even more constrained on FX intervention if tariff negotiations are still in play"

Gilts follow peers lower at the open, with a soft start to this week’s U.S. Tsy issuance and a move away from Tuesday lows in crude oil futures eyed.

• Note the European and U.S. issuance (detailed earlier) is due today and may be providing some weight this morning.
• Futures through yesterday’s low but within this week’s range.
• Lows of 92.36 seen so far.
• Bears will look to force a break of Monday’s low (92.24) to expose the 20-day EMA (91.86), as they look to quell some of the recent bullish momentum. Initial resistance at yesterday’s high (92.84).
• Yields 1.5-3.0bp higher, curve bear steepens.
• 2s10s back above 70bp after the first close below since early July, while 5s30s remains pinned around 140bp.
• GBP STIRs a little more hawkish than pre-gilt open levels, SONIA futures flat to -3.5. BoE-dated OIS still showing ~48bp of easing through year-end, with over 90% odds of a cut priced for tomorrow.
• NIESR comments underscored UK fiscal worry and an in line with market pricing view of future BoE policy moves (detailed in our early morning STIR bullet).
• Little of note on the UK calendar today.

• MNI: EUROZONE JUL FINAL CONSTRUCTION PMI 44.7 (45.2 JUNE)