Norges Bank to deliver a hawkish message this week – Danske Bank

Chief Strategist at Danske Bank Valtteri Ahti expects the Nordic central bank to open the door to a potential rate hike in September.

Key Quotes

“In terms of the NOK, all eyes are on Thursday’s Norges Bank meeting. In short, we expect Norges Bank to raise the rate path opening a door for a September rate hike at roughly even odds (50/50)”.

“However, as this would be consistent with the latest change in market pricing, we think the positive impact on the NOK would be fairly limited. That said, we clearly see the balance of risk skewed towards another hawkish surprise, as Norges Bank could open up the door for a hike as early as June”.

“Indeed at the past five meetings, where a monetary policy report was released, Norges Bank has surprised markets in a hawkish direction and EUR/NOK has fallen. We remain short EUR/NOK and long NOK/SEK”.