SCANDIS: Norway RNS May Be Of More Consequence To NOKSEK Than Swedish CPI

NOKSEK may be more sensitive to tomorrow’s Q3 Norwegian Regional Network Survey (RNS) than Swedish August CPI, with the former being the final key input for the Norges Bank ahead of next week’s decision, where an updated rate path will be presented. 

• As noted in our post above, we don’t think Swedish CPI will meaningfully change the policy picture for the Riksbank. However, soft readings for expected output and wage growth in the RNS would weigh on the Norges Bank’s September rate path (alongside actual inflation, which has tracked below the June projections). 
• This could see the likelihood of the first Norges Bank cut being pulled forward to December this year (versus Q1 2025 in the June vintage).
• Options markets assign a slightly higher overnight vol premium in NOKSEK versus the YTD average, pushing the breakeven on an overnight ATM straddle to ~35 pips in the cross.
• Such a swing to the downside would almost be enough to test multi-year pivot support at 0.9500.
• The medium-term trend in NOKSEK remains bearish, with weakness in the oil space driving the moves lower in spot over the past few weeks.