Erik Johannes Bruce, Research Analyst at Nordea Markets, notes that as widely expected Norges Bank was on hold today and explains that the main conclusion was that “the outlook and the balance of risks do not appear to have changed substantially since the September Report.”
Key Quotes
“In listing up news since the September report Norges Bank conclude that most have been broadly in line with expectations. But close reading might suggest more upside surprises than downside. Both inflation, rates abroad and money market premium is pointing to higher rates. Weaker growth is the only downside surprise. Norges Bank however sum up the main news up by saying: “Economic growth has been a little lower and inflation somewhat higher than projected”. We find the reference to weak growth a bit strange since Norges Bank also points to temporary factor as main explanation for the weak August GDP figure.”
“Overall we find news in sum to be on the upside, but Norges Bank clearly did not want to give new signals. They want to tell the market that one should expect the next hike in Q1 2019 (which we think means March).”
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