ridethepig | EURSEK 2020 Macro MapTime for another forward walk in 2020, this time the focus is EURSEK. I am tracking for a year of "two halves" with the first providing support for SEK and a lot of demand for the most undervalued G10 cross.
On the SEK side lets start with the Long-term chart:
On the EUR side lets start with the Long-term chart:
For the Swedish Macro details, Sweden is badly exposed to extreme levels of domestic credit with the SEK depreciation. Houses in Sweden have also not been attractive for a while and are finally showing signs of a bounce. The Riksbank is widely expected to hike in Dec, if the housing market plays ball then we can have more hikes from Riksbank next year.
We have traded EURSEK a few times previously here:
Risks to the thesis come from the Swedish housing market, if this breaks down we are going to see expectations shift in EURSEK. I will be releasing my 2020 FX outlook reports along with other strategy research in the coming weeks. 2020 is setting up for fireworks on the FX board with expectations and valuations starting to diverge and with late cycle concerns creeping back in through the back door to put the cherry on top. For those interested can send a PM on here or Tradingview.
