SCANDIS: EURNOK Pierces Key Resistance; Riks and Norges Decisions Next Week

EURSEK has traded in a sideways fashion since the start of September, but building downward momentum is helping narrow the gap to an important support zone around 10.9000. A clear break of this level would expose 10.8000, which aligns closely with the April 4 low (10.7941).

• The case for continued SEK outperformance is largely tied to the growth differential channel. Recent domestic data have supported these arguments, with Swedish activity being supported by stimulative monetary policy, incoming fiscal stimulus and lower trade policy uncertainty.
• Current Bloomberg consensus sees EURSEK at ~10.90 by year-end, before falling to 10.70 by the end of next year.
• EURSEK is down 0.3% intraday, seemingly a function of the 1% rally in European equity futures.
• Swedish final October inflation is due tomorrow. The flash reading was 2.8% Y/Y (2.76% unrounded), two tenths above Riksbank and consensus projections. However, the final reading details are unlikely to be a gamechanger for markets, with policymaker guidance clear that the policy rate is likely to remain at 1.75% for "some time to come".

FFF6/G6 paper paid -9.5 on 22.5K, ~24K trades there all day. Level is taken bid over with small trading at -9.0 on the follow.

• Some suggestion that Real Money is said to have been HUGE buyers of Upside via Option with around 300k going through this past Week.
• These are looking for a more Dovish path which could be supported given the Latest poor round of US Employment Data.
• The TYF (expiry 26th Dec) 113.50 and 114 calls have mostly been targeted and have been bought in 200k and 100k respectively, these will also expire when the UK are closed.