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Norges Bank is unanimously expected to keep the policy rate on hold at 4.50%, with policy guidance once again likely to remain cautious. We think the December meeting (and its associated forecast updates) well be a more appropriate time to signal a tilt in stance.
Familiar trade-offs are at play heading into the November decision. Inflation was once again below the central bank’s projections in September, but the krone exchange rate has weakened again.
All 13 of the sell-side previews we have seen (and the 19 analysts surveyed by Bloomberg) expect the Norges Bank to hold rates at 4.50%. Looking ahead, there is a clear split between Scandinavian banks and other analysts.
Markets price no chance of anything but a hold in rates in November, while there are just 3bps of easing priced through December. As such, there appears little scope for a major market reaction to the November decision.
Sign up now for free trial access to this content.
Please enter your details below.
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.
MNI (LONDON)
EXECUTIVE SUMMARY
Norges Bank is unanimously expected to keep the policy rate on hold at 4.50%, with policy guidance once again likely to remain cautious. We think the December meeting (and its associated forecast updates) well be a more appropriate time to signal a tilt in stance.
Familiar trade-offs are at play heading into the November decision. Inflation was once again below the central bank’s projections in September, but the krone exchange rate has weakened again.
All 13 of the sell-side previews we have seen (and the 19 analysts surveyed by Bloomberg) expect the Norges Bank to hold rates at 4.50%. Looking ahead, there is a clear split between Scandinavian banks and other analysts.
Markets price no chance of anything but a hold in rates in November, while there are just 3bps of easing priced through December. As such, there appears little scope for a major market reaction to the November decision.
