According to Erik Johannes Bruce, analyst at Nordea Markets, next week’s Norway’s figures will probably be close to Norges Bank’s forecast and if that is the case, there is a fair chance that Norges Bank will rise the rate path somewhat despite the increased international uncertainty
Key Quotes
“Norges Bank has clearly stated that “the uncertainty surrounding global developments” argue for a “cautious approach”. That argument is strengthened lately with the increased trade tensions and unrest in financial markets. Add to this that oil prices are 8-9% lower than expected and that expected rates abroad have fallen.”
“Still, we are in no serious doubt about the coming June hike and still believe there is a fair chance that the rate path for 2020 will be lifted. NOK is 2-3% weaker than expected and the Q2 oil investment survey was on the strong side. Moreover, labour market figures have in sum been on the strong side with both unemployment measures somewhat on the downside and Q1 employment growth on the upside. However, next week’s Q2 Regional Network and May core inflation, both out 11 June, will be important for the look of the path. But if they end up as we expect, there should be no need to change the main conclusion. The June hike could be accompanied with a somewhat higher path.”
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