Norges Bank seen ‘on hold’ next week – Danske Bank

Chief Analyst at Danske Bank Allan von Mehren gives his views on the potential outcome of the Norges Bank meeting due next week.

Key Quotes

“In terms of EUR/NOK, today’s Regional Network Survey is likely to show that mainland growth prospects remain solid, and somewhat better than projected by NB”.

“Meanwhile, with (1) low inflation, (2) a strong NOK versus NB’s forecast, (3) a cooling housing market and (4) lower global rates, NB can easily extend the on-hold stance at its meeting next week”.

“We maintain that EUR/NOK is a range play but the risk of a correction higher has increased, in our view”.

“Specifically, given the recent rise in long NOK positions, EUR/NOK has become increasingly sensitive to drops in the oil price. As expected, the parliamentary election in Norway had very limited market impact”.