15 Dec 2015
Close call at the Norges Bank – Danske Bank
FXStreet (Edinburgh) - Analysts at Danske Bank noted the divided opinions regarding the potential outcome of the Norges Bank meeting this week.
Key Quotes
“In Norway, we were almost entirely convinced that Norges Bank would not cut interest rates at its meeting on Thursday, but after the recent drop in oil prices we now pretty much see a 50/50 chance of a reduction”.
“Q3 GDP was actually a little better than anticipated and although the regional network is pointing to somewhat weaker growth going forward, this is more or less as expected. Inflation has also been in line with expectations and there has been little change in the outlook for global growth”.
“On the other hand, fiscal policy looks set to be somewhat more expansionary next year, and the krone is almost 5% weaker than expected”.
“The decline in oil prices since September has, however, been substantially less than that from June to September and may not therefore be enough to spur the central bank into action”.
“We very tentatively predict that Norges Bank will hold fire this time around but indicate a very high probability of a reduction at its meeting in March. As we say, though, there is a more or less even chance of a cut here and now”.
Key Quotes
“In Norway, we were almost entirely convinced that Norges Bank would not cut interest rates at its meeting on Thursday, but after the recent drop in oil prices we now pretty much see a 50/50 chance of a reduction”.
“Q3 GDP was actually a little better than anticipated and although the regional network is pointing to somewhat weaker growth going forward, this is more or less as expected. Inflation has also been in line with expectations and there has been little change in the outlook for global growth”.
“On the other hand, fiscal policy looks set to be somewhat more expansionary next year, and the krone is almost 5% weaker than expected”.
“The decline in oil prices since September has, however, been substantially less than that from June to September and may not therefore be enough to spur the central bank into action”.
“We very tentatively predict that Norges Bank will hold fire this time around but indicate a very high probability of a reduction at its meeting in March. As we say, though, there is a more or less even chance of a cut here and now”.