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4 May 2016
Sell EURSEK on rallies – BNPP
Research Team at BNP Paribas, suggests that following an upward revision to the Eurozone April manufacturing PMI, their economists see some upside risk to the final estimate of the services PMI initially reported at 53.2.
Key Quotes
“Stronger Eurozone growth benefits its main trading partners such as Sweden, where economic momentum has been particularly positive recently. Minutes from the Riksbank’s April meeting will shed more light on the decision to extend but also scale back QE. We don’t think the minutes will change the market’s perception that the Riksbank is nearly done with policy easing. We think risk of FX intervention remains, but only if EURSEK falls rapidly to the 9.00-9.10 levels. We remain biased to sell into EURSEK rallies. We forecast a move below 9.00 by yearend targeting 8.90 at end Q4.”
Key Quotes
“Stronger Eurozone growth benefits its main trading partners such as Sweden, where economic momentum has been particularly positive recently. Minutes from the Riksbank’s April meeting will shed more light on the decision to extend but also scale back QE. We don’t think the minutes will change the market’s perception that the Riksbank is nearly done with policy easing. We think risk of FX intervention remains, but only if EURSEK falls rapidly to the 9.00-9.10 levels. We remain biased to sell into EURSEK rallies. We forecast a move below 9.00 by yearend targeting 8.90 at end Q4.”