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

NORGES BANK
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.

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