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*REPEAT* POV: UNLIKELY TO ROCK THE......>

NORGES BANK
NORGES BANK: *REPEAT* POV: UNLIKELY TO ROCK THE BOAT: A pause at the Oct meeting
(Thurs) looks assured after Norges Bank hiked rates 25bps to 0.75% in Sep.
- Based on the Bank`s quarterly projections, MNI estimates no chance of an
October rate move and just a 26% probability of another 25bps hike in December.
- Projections will not change, with no new MonPol Report due, and no press
conference. As such, there is little chance of a market-moving revelation.
- Overall, Norges will need time to see if global turbulence is feeding through
to the real economy, but latest data show no softening in overseas demand (For
more see State of Play: Cautious Norges Bank To Stick To Q1 Hike, Oct 22).
- As such, current guidance for next 25bps hike in Q119 is likely to stand.
- Current Norges Bank projections imply 50bps in hikes by end-2019.
- Further out, current Bank forecasts show the benchmark rate rising to 1.64% by
end-2020 and 2.00% by end-2021, with protectionism and emerging market
turbulence cited as downside risks.
- Forward rate markets are more sceptical: while very close to NB guidance
through early 2021, they price around a 25bps hike less for end-2021 (~1.77%).

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