The net developments in Norges Bank rate path model suggest that Norges Bank will remain patient. Not much has changed since March. This is net hawkish relative to market expectations.
Trade Alert: Playing the last reflation saloon and NOK technicalities
The final reflation melt-up may be right in front of us during Q2. Position accordingly.
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Norway Watch: Cheat sheet to assessing Norges Banks rate path
The mechanical adjustments are likely going to lead to a hawkish revision of the Norges Bank rate path tomorrow unless the subjective layer is used to send another signal. Risks tilted towards a hawkish take-away.
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Inflation Watch: Another deflation shocker from Europe? UK, Sweden and Norway are under the loop!
Another set of soft inflation numbers is set to be released from Europe in the coming weeks. We see both GBP and NOK inflation surprisingly low for November, while Swedish evidence is a tad more mixed.
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FX Watch: The Scandinavian FX massacre
Norges Bank finally made a decent attempt at underpinning the NOK, but the issue is that rates don’t really matter for the NOK. They matter a bit more for the SEK, which makes a SEK long tempting ahead of next week. Is the Scandi bloodbath over?
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5 things we watch: May-inflation, Duration bets, Corporate profits, Scandi FX and the USD
The USD is on the move and as per usual, repercussions are felt across the financial markets. Disinflation seems to be pretty across most of the globe and China is now actively exporting lower prices again. Position accordingly.
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Trade Alert: The reverse tax bomb continues in Norway
Norges Bank is still asked to sell plenty of NOKs a month by the Treasury Department, while the scope for tax income is falling apart by the week. Position accordingly through June.
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Trade idea: The REVERSE tax bomb for NOK – Buy USDNOK or EURNOK
Norges Bank is once again caught behind the curve in its FX management policy due to the landslide in Natural Gas prices. Unless Norges Bank immediately stops selling as many NOKs per day, the NOK selling pressure is likely going to continue.
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Something for your Espresso: Markets betting on low inflation AND a Chinese reopening
The market is doing exactly what it should do, if US/Western inflation is falling and China is fueling the global economic growth momentum again. The question is whether it is sustainable to bet on that cocktail. We doubt it.
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