BELGIUM AUCTION RESULTS: ORI Operation

Yesterday, Danske Bank recommended a tactical USDSEK short with a soft target of 10.40 and a hard stop-loss of 11.10 (ref 10.86, time horizon of 1-3M). They view current near-term Fed pricing as “beginning to look overly hawkish” and see SEK at oversold levels following the Riksbank’s 50bp cut.

• Although Danske view the US election result as posing medium- to long-term risk of more persistent inflation, they “expect to see the concrete effects only towards H2 2025”. As such, they believe the “current macro data still supports continuing gradual 25bp [Fed] cuts in the coming meetings”.
• Additionally, they point to krona-positive seasonality towards year-end, which improves the risk-reward of buying SEK.
• “We would like to emphasize the tactical nature of this trade, as we from a medium-term perspective still expect a higher USD/SEK over the course of 2025”.