Last week, I was in the US seeing hedge fund and real money clients. Below, we list key takeaways and how US investors' views differ from our owns.
US investors were neutral/negative on bunds and bearish on periphery bonds. We expect bunds to stabilise over the summer and favour RV trades such as long 15Y Ireland vs. short 13Y Belgium
US investors expect Fed to raise rates in September/December and remain cautiously medium-term USD bulls. We expect gravity to prevail and are looking for a final-leg lower in EUR/USD over the summer.
US investors are sceptical that Riksbank will do more and appear to be looking for paying SEK rates and buying SEK. We disagree as inflation will surprise on the downside during autumn forcing Riksbank to act. Investors should receive SEKFRADEC15 and sell 2W EUR/SEK straddle.
Investors are confused on Norges Bank and NOK FI and FX markets. We expect NB to cut rates on Thursday and shift to a neutral bias. Investors should pay NOKFRADEC15 and sell EUR/NOK, target 8.30.
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