The Riksbank, Sweden’s central bank, will meet on Tuesday for its latest interest rate decision and could surprise investors. Consensus expectations are for only a 25 bp rate cut. This is despite a larger than forecasted reduction in the Norwegian interest rate by the Norges bank who cut rates by 50 bp last week.

As discussed in today’s FOREX216 Daily Analysis, overstretched market positioning has allowed for a bit of a EUR short squeeze on the back of a solid Spanish bond auction and strong US housing numbers.