[cppene]

In FX space, banking woes and balance sheet considerations have been the main drivers for FX markets over the last 6 months. Fears over the health of the local banking system have led GBP and SEK to depreciate sharply. What the market appears to have chosen to disregard, however, is the fact that activity growth in both the UK and Sweden may outperform on the back of very supportive relative financial conditions..

In that sense, it is very interesting that the Swedish and UK PMIs surprised to the upside. Reflecting this theme, the recommendation is to remain

long SEK vs. CHF as a tactical trade,
long GBP/$
and short EUR vs. SEK, GBP and NOK positions as a strategic Top Trade position.