💲🔺 Nordea: We're Still Tactically Upbeat On The USD

• The US inflation outlook is by far the most hawkish compared to peers – e.g. showcased by the biggest core inflation spread between the US and the Euro zone on record

• Banca d’Italia is net/net the sole new owner of all Italian government debt issued over the past 12 months. This likely also means that it will be even trickier for the ECB than the Fed to taper purchases in a swift way

• Markets currently price the ECB almost as a 50% beta case to the Fed. If the Fed hikes by 25 bps in 2023, the market expects the ECB to hike by 12.5 bps and so on

• This simply seems super exaggerated to us, unless the ECB decides to do a Riksbank and bring policy rates to 0% due to a sudden epiphany on the adverse side-effects of negative interest rates. So far we see (very) limited signals of such a move within the ECB