This week the scorecard recommends buying SEK, NOK and JPY while selling CHF, EUR/USD and GBP/USD.
Last week's sell-off in SEK seems overdone according to the model and, as the technical input factor currently also has a constructive view on SEK, the scorecard recommends buying SEK this week. Note however, that the input factor for interest rates remains negative on the krona. In contrast to SEK, all input factors with the exception of FX score favor a long position in the other Scandinavian currency, NOK, and thus the scorecard also recommends buying NOK.
All input factors currently have a negative view on EUR and CHF and the scorecard recommends selling both currencies this week. In particular, the input factor for interest rates has a negative signal on the euro, whereas the risk premium input factor has a negative signal on the franc due to the past week's increase in 1M USD/CHF implied volatility. Finally, the this week's short basket includes GBP following last weeks rally.
Last week's signals resulted in a 0.2% gain. In particular, the short SEK position performed while the long NOK position was expensive. Year to date, the scorecard model has generated a total profit of 4.3%.
Next scorecard signals will be sent out on 2 June.
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