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Hawkish Tilt May Push Back September Rate Cut Calls

NORGES BANK
HomepageBulletMarketsFixed Income BulletsForeign Exchange BulletsNorges Bank Market News

NOK strengthens against the EUR, USD and SEK as the Norges Bank introduce a hawkish tilt to their policy statement. EURNOK did not quite reach the 20-day EMA at 11.7279 though, and has already pared losses a touch.

  • Some analysts had flagged the hawkish tilt as a possibility coming into the decision, given the recent developments of the krone and the higher-than-expected labour union wage agreements.
  • Guidance that the policy rate should be kept on hold for “some time ahead” was retained, as was the final paragraph which notes two-way risks to the policy rate relative to the March projections.
  • The monetary policy assessment notes that while price inflation is slowing, it is still “markedly above target”. Furthermore, wage growth “may prove to be slightly higher than projected in March”.
  • Overall, Norges Bank continues to lean hawkish, and today’s decision suggests that the current consensus for a September rate cut may need to be pushed back somewhat.
  • The press conference (in Norwegian) begins at 0930BST/1030CET.
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NOK strengthens against the EUR, USD and SEK as the Norges Bank introduce a hawkish tilt to their policy statement. EURNOK did not quite reach the 20-day EMA at 11.7279 though, and has already pared losses a touch.

  • Some analysts had flagged the hawkish tilt as a possibility coming into the decision, given the recent developments of the krone and the higher-than-expected labour union wage agreements.
  • Guidance that the policy rate should be kept on hold for “some time ahead” was retained, as was the final paragraph which notes two-way risks to the policy rate relative to the March projections.
  • The monetary policy assessment notes that while price inflation is slowing, it is still “markedly above target”. Furthermore, wage growth “may prove to be slightly higher than projected in March”.
  • Overall, Norges Bank continues to lean hawkish, and today’s decision suggests that the current consensus for a September rate cut may need to be pushed back somewhat.
  • The press conference (in Norwegian) begins at 0930BST/1030CET.