Battle of the Vikings - Ragnar vs Earl

Dec 19, 2023

In the duel of the Nordic nations between the strong Norwegian Ragnar (NOK) and the fierce Swedish Earl (SEK), only one can survive.

I am betting my gold coins on the Norwegian krone for the following reasons:

- NOKSEK is fundamentally undervalued
-> fundamentally the pair should rather be trading at 1.04 - 1.05
- Norges Bank surprised EVERYONE (including me) with an interest rate hike last week
-> inflation is still giving it a hard time
- Oil saw some strength again recently
- NOKSEK with a seasonally strong phase in January and February
- Norges Bank could reduce its NOK sales in the new year
- Rebalancing flows

From a Swedish perspective:
- The unemployment rate has recently been higher than expected (looting Vikings are currently less in demand)
- Swedish inflation rate fell more than expected (due to house prices (no, not Viking huts))
- Riksbank sold more FX reserves than expected within its hedging programme
-> less powder available

Dec 20, 2023

Note

📊Thursday we will get the unemployment rate out of Norway
📊Friday we will get the Retail sales and PPI out of Sweden.

After that the year is over and I'm sure next year the trade will start to run.

Jan 2

Note

🟢The Norges Bank radically reduced it's NOK Sales
(-> 🔮As I forecasted)
so the trade has now a very high chance to be a winner✅️

Jan 5

Note

Next wednesday will be a Highlight:
📊🇸🇯We get PPI and CPI out of Norway
As well as
📊🇸🇪Retail Sales, GDP and Industrial production out of Sweden

Jan 10

Note

📊🇸🇯CPI out of Norway was slightly weaker than expected but nothing to get excited about.
-> Norges Bank probably still on hold for now.

📊🇸🇪Retail Sales, GDP and Industrial production out of Sweden were all more or less as exptected.

Jan 18

Note

🟢The Trade made a first attempt at parity but couldn't breach it so far🟢

📊🇸🇪Nevertheless I expect it to break and trade above parity soon as data out of Sweden continues to be rather weak and SEB could close their hedging program soon ✅️

Feb 7

Note

🟢My NOKSEK long caught its first glimpse above parity last week, but this was not yet of a sustainable nature.

📊🇸🇯 However, the GDP data from Norway next week could provide fresh fodder for another breakout.

Mar 18

Note

This week we have the 📊🇸🇯 interest rate decision by Norges Bank.
I'm not expecting any fireworks, still perhaps this week will finally provide the strong impulse to free the 🇸🇯NOKSEK🇸🇪 from its multi-week range.

Apr 11

Note

📊🇸🇯The Norges Bank was indeed on the hawkish side, still after the weaker than expected Norway CPI yesterday I'm expecting some more time for my NOKSEK Long tp breach parity and starting a rally upwards🟢