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.
Executive Summary:
- Bank seen unchanged for first time since tightening campaign began
- Inflation pressures still building, meaning future hikes likely
- Markets well priced for no change, but minority sell-side view sees further hike in January
Full preview including summary of sell-side views here:
The Norges Bank will likely keep deposit rates unchanged at 2.75% in January, marking the first unchanged decision since the beginning of 2022’s tightening cycle. This policy meeting marks the smallest business day-gap between rate decisions of the year, with data divergence since the December MPR not sufficient at this stage to deter from their forward guidance. This makes a 25bps rate rise in March possibly the final tightening step of the campaign.
December’s meeting resulted in a ‘single’ hike of 25bps, with the accompanying policy statement acknowledging the need for further tightening going forward. This resulted in a notable change in wording, with a shift to the phrasing around the next hike. After previously highlighting specific meetings at which rates would rise, wording has now changed to the “policy rate will most likely be raised further in the first quarter of next year”, adding some optionality around timing. Along with path pricing back-loading tightening in Q1, this further indicates the bank’s intention to next move in March.
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.