The front-end (0-1M) of the vol. curves in both EUR/SEK and EUR/NOK have moved higher over the past week.
For EUR/NOK, the move higher in vol. is mainly driven by the break higher in the spot and the oil price decline.
For EUR/SEK, the increase in vol. is caused by the combination of the upcoming Riksbank meeting and political jitters, where the risk of a new election continues to increase.
Event risks priced in for the December CPI print in Sweden and Riksbank meeting have increased, and the 1M EUR/SEK tenor has reached expensive territory, according to our monitor. However, we generally see more upside risk to Scandi vol in the coming weeks.
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