Free Trial

Fresh Trend High


Coming up in the Asia-Pac session on Tuesday:


BoE Emergency Action Talk Spurs Higher US Tsy Ylds


Late Eurodollar/SOFR/Treasury Option Roundup


Trend Needle Still Points South

Real-time Actionable Insight

Get the latest on Central Bank Policy and FX & FI Markets to help inform both your strategic and tactical decision-making.

Free Access

August Meeting of Little Consequence, Bank to Wait Until September Projections

Figure 1: Rate path projections surprisingly edged higher in June

Source: MNI/Norges Bank

MNI Point of View:

  • June's policy projections were a surprise, with the Norges Bank going against the tide of other global central banks and specifying a date by which they expect to begin tightening policy. With this month's decision restricted to just the announcement on rates and a small policy statement, the Norges Bank will wait until September before shedding any more light on their policy intentions.
  • There remain both upside and downside risks to the Norwegian economic recovery, with bouncing oil prices and a bubbling property market on one hand, and the threat of a second COVID wave and a retrenchment of consumer spending on the other. How the executive board judge these risks will be evident in any revisions to the rate path projections in September.
  • Alongside the more hawkish rate path in June, the Bank cemented their stance that they don't see the deployment of negative rates as a viable solution to any future downturn: "the Committee does not envisage making further policy rate cuts". Barring any very considerable downside risks this year, that is to remain the case.
  • That's not to say the Bank don't have other tools at their disposal. Despite the bank removing the two-way risk to rates, there are policy measures available to ease financial conditions in any future recession (COVID-induced or otherwise). On August 14th, the bank extended the deadline of their extraordinary F-loans program to the end of 2020 and warned that the offerings of the F-loan program could be adjusted at short notice "if market conditions so warrant". This should protect Norwegian markets from any meaningful liquidity shortage in the coming months.
  • This leaves the Norwegian economy well poised to follow the Bank's forecasts, narrow and close the output gap over the coming two years, and justify higher policy rates.

To read the full story

Why Subscribe to

MNI is the leading provider

of news and intelligence specifically for the Global Foreign Exchange and Fixed Income Markets, providing timely, relevant, and critical insight for market professionals and those who want to make informed investment decisions. We offer not simply news, but news analysis, linking breaking news to the effects on capital markets. Our exclusive information and intelligence moves markets.

Our credibility

for delivering mission-critical information has been built over three decades. The quality and experience of MNI's team of analysts and reporters across America, Asia and Europe truly sets us apart. Our Markets team includes former fixed-income specialists, currency traders, economists and strategists, who are able to combine expertise on macro economics, financial markets, and political risk to give a comprehensive and holistic insight on global markets.