Re-entering long NOK (via SEK)

The double dip in oil prices has given an opportunity to re-establish a core long NOK position, but this time versus SEK, according to RBC Capital Markets.

• "Our reasons for being constructive on NOK are the same today as they were six months ago (low oil break-evens and an oil wealth fund that acts as an economic stabiliser)."
• "The timing seems right to us: NOK/SEK is basing near decade lows, rising Norwegian house prices and household debt ratios will keep NOK rates from falling too low, and pressure on the Riksbank to raise CPI argue for NOK/SEK topside risk in our view."
• "We enter into a long 1Y NOK/SEK risk-reversal at 0.98/1.045 for zero cost (spot ref: 1.025)."