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NOK FRA Hits New High as Stubborn CPI Juices Rate Expectations

NORWAY
  • EUR/NOK just off the day's low of 11.5486, finding support at the Monday/Tuesday low. NOK is among the strongest in G10 today following stubbornly high CPI-ATE (6.3% vs. Exp. 6.1%) - which should keep a tightening bias at the Norges Bank.
  • NOK FRAs have been marked higher post-inflation, with the 1x4 FRA hitting a new cycle high of 4.01 to mirror rising rate expectations.
  • Norges expected to hike a further 25bps in June, with fresh rate path projections seen tipped toward 4.00% due to today's CPI and the persistently weak NOK.
  • 11.4471 marks the 50-dma for EUR/NOK, with support seen into the mid-April low of 11.3582.

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