Norges bank to be one of the last standing doves - TDS

Analysts at TDS are looking for the Norges Bank to maintain its easing bias in this week’s MPR, leaving its policy rate projections little changed from March with a trough of 0.40%.

Key Quotes

“While there has been good news on the growth side, Norway still has an inflation problem. Inflation continues to undershoot the Norges Bank’s forecasts with a likely further round of downward revisions to come.”

“More analysts seem to be looking for an upgrade to the Norges Bank’s policy rates forecasts, either via a smaller easing bias in the near-term, or pulling forward rate hikes from mid-2019 currently. That leaves us on the dovish end of expectations.”

“We see significant upside potential for EURNOK in the wake of the policy announcement if the Norges Bank confirms our dovish expectations. With oil prices under considerable pressure, the rejection of a hawkish pivot that some observers expect could send the cross to fresh highs above the 9.60 mark.”