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Free AccessEUR/NOK Clears Solid 100-dma Support as Rate Pressures Build
- EUR/NOK has made a protracted move lower today, extending the move triggered Monday on the back of the higher-than-expected June inflation release. The cross is now well through the 100-dma (which provided strong support in mid-June) for the first time since Q3 last year. Horizontal support at 11.4199 marks the next downside level - but is in very close proximity to today's low.
- Core CPI clearing forecast yesterday helped bolster sellside views of a greater risk of 50bps at the August meeting, with most analysts acknowledging the possibility of a higher path trajectory ahead - although July CPI (Aug10) is still due ahead of the next meeting (Aug17). Firmer oil prices also lending a hand to oil-tied FX, although NOK/CAD is also posting a solid multi-day rally, suggesting domestic factors are more at play.
- Elevated Norges Bank pricing further reflected in FRA pressures Tuesday; the Sep/Dec 3m FRA sits at new cycle highs of 4.85, building on the 10bps daily rise posted into the Monday close. Impacts also felt further out the curve, with Mar24/Jun24 FRA marking peak rate expectations and touching 4.91.
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Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.