19 Jun 2015
Norges back cuts rate by 25bp, more easing ahead in H2 – Nomura
FXStreet (Barcelona) - According to Yujiro Goto, Research Analyst at Nomura, the Norges Bank cut its rates yesterday by 25bps while maintaining an easing bias, which suggests that another rate cut remains likely in H2, 2015.
Key Quotes
“Norges Bank cut its repo rate by 25bp to 1.00% as widely expected. The Bank’s downgrade of its repo rate path was more significant than we expected. Norges Bank suggests its repo rate may be reduced further in the course of autumn, and NOK negatively reacted.”
“The next policy rate decision meeting will be held on 24 September, and we will examine incoming information closely before then, while a more Norges Bank dovish stance suggests a higher possibility of another cut in H2 this year.”
“As the risk of another rate cut by Norges Bank remains into H2 2015, we expect NOK to trade weakly in the near future, even though we judge NOK is now in the bottoming phase against EUR, as well as the repo rate path. We expect NOK to start trading more strongly into 2016, but the timing for a positive move in NOK will be delayed now, and we keep a neutral stance for NOK for the time being.”
Key Quotes
“Norges Bank cut its repo rate by 25bp to 1.00% as widely expected. The Bank’s downgrade of its repo rate path was more significant than we expected. Norges Bank suggests its repo rate may be reduced further in the course of autumn, and NOK negatively reacted.”
“The next policy rate decision meeting will be held on 24 September, and we will examine incoming information closely before then, while a more Norges Bank dovish stance suggests a higher possibility of another cut in H2 this year.”
“As the risk of another rate cut by Norges Bank remains into H2 2015, we expect NOK to trade weakly in the near future, even though we judge NOK is now in the bottoming phase against EUR, as well as the repo rate path. We expect NOK to start trading more strongly into 2016, but the timing for a positive move in NOK will be delayed now, and we keep a neutral stance for NOK for the time being.”