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Analysts at Nomura explain that the Norges Bank has started its policy normalisation cycle with a somewhat dovish message.

Key Quotes

“It has downgraded the deposit rate forecast, which shows there is more emphasis on the slightly weaker growth numbers than positive inflation.”

“In addition, increasing concerns about slowing global growth momentum seem to have a greater impact on Norges Bank policy. As the market is likely to continue pricing some downside risks to the current rate forecasts, today’s meeting suggests the positive NOK story has now largely played out and we thus take a more neutral stance for now.”