0-2W tenors of NOK and SEK crosses have increased further over the past week and our volatility monitor indicates that the 2W tenors are expensive. However, given the very event-packed calendars, with both Norges Bank and Riksbank meetings in coming weeks, we believe pricing is fair.
We see risks skewed towards a slightly hawkish Norges Bank on Thursday and we like to position for a lower EUR/NOK via a 3M (NYSE:MMM) ratioed bearish seagull. See Reading the Markets Norway - NB preview: March hike to be confirmed (10 December).
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