Norges Bank seen ‘on hold’ this week – Danske Bank

Analysts at Danske Bank expect the Nordic central bank to leave its monetary status quo unchanged at this week’s meeting.

Key Quotes

“Norges Bank (NB) is widely expected to leave the sight deposit rate unchanged at 0.50% at Thursday’s meeting and reiterate its ‘on hold’ stance”.

“With little new information since the March meeting and with no monetary policy report due we expect no new signals in the press release or at the press conference”.

“On balance, there is little reason to expect NB to change its signals at this stage. NB will receive several important releases ahead of the June meeting (e.g. inflation, Regional Network Survey, GDP and oil investment survey), leaving NB in a good position for awaiting more clarity on the outlook before modifying its communication. Also Thursday’s meeting does not include a new monetary policy report/rate path”.

“Risk-reward, therefore, suggests positioning for a moderately steeper FRA curve and a stronger NOK, even if we stress the NOK near term has been driven by external developments that seem more challenging. From a long-term strategic perspective, however, we still find value in gradually building up long NOK exposure”.