### POV: NORGES TO REAFFIRM Q1 HIKE.....>

NORGES BANK: ### POV: NORGES TO REAFFIRM Q1 HIKE EXPECTATIONS

-Executive board release not only their policy decision, but also the latest

Monetary Policy Report, with fresh economic forecasts for 2019 and beyond. For

markets, the key figures to interpret will be the projected rate path, which is

expected to continue to show a hike in Q1. The inputs for their growth and

inflation projections, including the oil price and the FX rate, have changed

markedly and will have material impacts on their forecasts. Nonetheless, the

board will focus on a further build in domestic inflationary pressure.

Hawkish risk: Bank dismiss the international energy effect on inflation to focus

on real earnings growth and wage pressures at home, highlighting the upward

pressure on rate projections which are likely to be the one part of the

forecasts that remains constant.

Dovish risk: Bank focus on sharply lower oil futures curve, highlighting the

ability of persistently weak oil prices to more than offset any re-balancing

factor from the NOK rate. This could further flatten rate projections, hurting

the NOK.