Norges Bank delivers a 25bps hike - TDS

Analysts at TD Securities note that the Norges Bank has delivered on their telegraphed 25bps hike to 0.75%.

Key Quotes

“This was accompanied with an overall dovish messaging on the forward guidance, in part reflecting some mild disappointment in hard data and wages, which saw them reduce their implied pricing for a hike over the next two quarters, leaving a 100% chance of a hike by mid-2019, with a slightly lower profile for tightening beyond there.”

“At the time of writing, this has left the market pricing about a 20-25% chance of a Dec hike, 55-60% chance for March, and 100% for June 2019.”

“Overall market pricing is mirroring the Norges Bank's forward guidance for slightly better odds of March over June for the next hike, but we maintain our forecast for the next hike to be delivered in 19Q2, as NOK appreciation and a potentially more mild inflation outturn may leave Norges more patient.”