The Norges Bank kept its policy rate on hold at 0.50% today, as had been nearly unanimously expected and more importantly, it stuck firm to its forecast for a Q3 rate hike, notes Jacqui Douglas, Chief European Macro Strategist at TDS.
Key Quotes
“On top of that, it also nudged up the amount of hiking that it’s expecting in 2019 from 45bps to 50bps, delivering the message that policy divergence with the ECB is not a major concern. So this was clearly a hawkish outcome.”
“Looking at the macro forecasts, the recent (and persistent) downside surprises to underlying inflation led to further downward revisions to core inflation forecasts, while growth projections have been revised higher.”
“Today’s Norges Bank decision didn’t bring any big surprises, but does help to cement the Norges Bank’s position as one of the more hawkish central banks in Europe.”
“The Norges Bank continues to commit to tightening policy, leaving us more bullish on NOK going forward.”
Share
