Norges Bank expected to remain unchanged – Danske Bank

Aila Mihr, Analyst at Danske Bank, noted the Norges Bank should keep its monetary status quo unchanged at next week’s meeting.

Key Quotes

“In Scandi FX markets, the Regional Network Survey in Norway marked the last key release ahead of next week’s Norges Bank meeting. However, as Monday’s inflation disappointment had already ruled out any rhetoric change, yesterday’s disappointing survey was no game changer and just underlines that Governor Olsen is likely to signal ‘low for longer’.

“We maintain EUR/NOK is a range play but the risk of a correction higher has in our view increased. Specifically, given the recent rise in long NOK positions, EUR/NOK has become increasingly and asymmetrically sensitive to drops in the oil price. We are currently in the process of reviewing our EUR/NOK forecast profile of 9.30 in 1M, 9.30 in 3M, 9.10 in 6M and 9.00 in 12M”.