Norges Financial institution: The Solely G10 Central Financial institution to Elevate Curiosity Charges

NOK Worth Evaluation and Speaking Factors:

Norges Financial institution: Solely G10 Central Financial institution to Hike

Give attention to the Charge Path

See our quarterly FX forecast to study what will drive costs all through Q1.

Norges Financial institution: Solely G10 Central Financial institution to Hike in Q1

The Norges Financial institution are anticipated to lift rates of interest on the March 21st assembly by 25bps to 1%. Since, the January assembly, information has largely been in step with the central financial institution’s financial projections. Alongside this, a weaker than anticipated NOK with oil costs pushing to Four-month highs (Norwegian break-even oil worth at $30/bbl) and inflation above forecasts (CPI-ATE 2.6% vs. NB forecast of two%), not solely makes a charge hike on the upcoming assembly a performed deal, but additionally advocates the case for a sooner than anticipated charge path.

Give attention to the Charge Path

Nonetheless, whereas Norway has been considerably insulated from the weak spot seen within the Eurozone and China, the decline in charge expectations overseas (most notably the Fed and ECB) may see the Norges Financial institution not solely reiterate their gradual strategy to charge rises, but additionally decrease their charge path within the longer run versus the near-term the place two hikes for 2019 continues to be anticipated.

Consequently, eyes can be on the speed path steering from the Norges Financial institution, which may state that “The boards present evaluation of the outlook and stability of dangers counsel that the important thing coverage charge will probably be raised after summer season 2019”, which in flip would make September a stay assembly (Steerage just like final 12 months).

EURNOK Chart: Day by day Time Body (Sep 2018 – Mar 2019)

Norges Bank: The Only G10 Central Bank to Raise Interest Rates

A sign from the Norges Financial institution that they are going to proceed elevating rates of interest, leaving a Q3 hike on the desk may see help at 9.65 break, extending a transfer in direction of 9.55. Given the strong state of the Norwegian financial system relative to the Eurozone and with oil costs hovering round Four-month highs a bearish EURNOK outlook appears promising.


— Written by Justin McQueen, Market Analyst

To contact Justin, e-mail him at

Comply with Justin on Twitter @JMcQueenFX

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