###POV: DOMESTIC STRENGTH TO TIP THE....>

NORGES BANK: ###POV: DOMESTIC STRENGTH TO TIP THE BALANCE, POINT TO SEPTEMBER

-Analysts are unanimous in seeing no change in policy at August's meeting.

Instead, focus lies on the accompanying Executive Board statement, at which the

Bank will likely leave the door open to a September rate hike but retain some

optionality to account for external risks from trade, Brexit and global

political tensions. There are no new forecasts or a press conference at this

meeting. Still strong capacity utilisation, decent underlying inflation and firm

credit growth should counter external risks this month, as they did back in May

- the last time the bank tightened.

-Dovish risk: With markets partially pricing a September move, any indication

the bank has closed the door on this outcome will lead to markets re-pricing

flatter short-end rates, allowing EUR/NOK to re-target cycle highs of 10.0969.

-Hawkish risk: A shift in language to rates "most likely raised in September"

would hurt those who have been successfully short NOK in recent weeks. Markets

have priced approximately 7bps of hikes for that month and bringing this closer

to 25bps would trigger a broad-based rally in the currency.