Societe Generale discusses its tactical views on G10FX on the intensifying trade wars theme and likes NOK and SEK against AUD and NZD as trade wars intensify and Scandinavian rate hikes come close.
"Sweden's election has left political gridlock in its wake, but Sweden Democrats, the anti-immigration party, made less progress than some had expected and that has triggered a relief rally for the Swedish krona. The Norwegian krona is helped by its neighbour, by higher oil prices and by an u[side surprise from inflation data.
The Norges Bank meets next week (Sep 20) and a rate hike is likely. At 9.7150 this morning, EUR/NOK is far higher than seems justified, and is a short in its own. The fall in both NOK and SEK has matched the weakness of high-beta G10 currencies, and reflects sensitivity to global trade, but it's surprising that NOK and SEK have fallen as much in recent weeks as AUD and NZD," SocGen notes.