NORWAY
Norges Bank’s September MPR rate path contains a ~20% probability of a rate cut in December. We think that if the Committee wants to seriously consider such a move, it will want to signal as such at the upcoming November 7 decision. This will keep focus on tomorrow’s inflation data, the only such release before the November decision.
- Norges Bank forecasted CPI-ATE at 3.3% Y/Y in the September MPR, while the current analyst median is 3.2%.
- Electricity-related base effects are seen pushing headline inflation higher, with Norges Bank projecting 3.1% Y/Y and analysts 3.2%.
- NOK has been influenced more heavily by swings in oil prices than rate differentials this year, but monthly inflation readings still have market moving potential (e.g. the June inflation report triggered a 1% intraday weakening of the krone). As such, overnight ATM NOKSEK vols are a little above the 2024 average at typing.
- Technical conditions in NOKSEK remain bearish, following the pullback over the last two days. Support is at 0.9572 (Sep 26 low), with resistance at 0.9780 (Sep 24 high)
- See below for a selection of analyst comments.
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