15 Jun 2015
Norges Bank expected to cut rates this week – Nomura
FXStreet (Barcelona) - Yujiro Goto, FX Strategist at Nomura, forecasts the Norges Bank to cut rates by 25bps in this week’s policy meeting, but expects NOK to see only a small downside risk.
Key Quotes
“We expect Norges Bank to cut its main policy rate by 25bp at its meeting this week. Economic data since the last meeting have not been strong enough to stop the planned 25bp cut, in our view. Market expectations for a 25bp cut are high, as all economists expect a 25bp cut next week based on a Bloomberg survey. Thus, the updated repo rate path will be important. We see a risk of a slight downward revision in the repo rate path, but the Bank may not assign a greater than 50% chance of another cut to 0.75% for now.”
“NOK could still trade weakly into the meeting, and oil price developments will remain an important driver for NOK. However, downside risk for NOK from monetary policy will be smaller after the expected cut , and after recent weakness, we expect NOK to trade more resiliently.”
Key Quotes
“We expect Norges Bank to cut its main policy rate by 25bp at its meeting this week. Economic data since the last meeting have not been strong enough to stop the planned 25bp cut, in our view. Market expectations for a 25bp cut are high, as all economists expect a 25bp cut next week based on a Bloomberg survey. Thus, the updated repo rate path will be important. We see a risk of a slight downward revision in the repo rate path, but the Bank may not assign a greater than 50% chance of another cut to 0.75% for now.”
“NOK could still trade weakly into the meeting, and oil price developments will remain an important driver for NOK. However, downside risk for NOK from monetary policy will be smaller after the expected cut , and after recent weakness, we expect NOK to trade more resiliently.”