Back
1 Sep 2015
Further easing still lies ahead for Norges Bank and Riksbank - Danske Bank
FXStreet (Edinburgh) - Senior Analyst at Danske Bank Jens Pedersen sees both Nordic central banks cutting rates in the upcoming months.
Key Quotes
“Both EUR/SEK and EUR/NOK bounced on Monday but for different reasons”.
“We see a 50/50 probability that the Riksbank will cut rates on Thursday. At the least, it will be very dovish, likely lowering its inflation forecasts”.
“The ECB will also be dovish on Thursday but we believe that the risks are skewed towards the Riksbank being more dovish than the ECB and hence EUR/SEK squeezing slightly higher”.
“In Norway the market is pricing in around 23bp of cut for the Norges Bank September meeting and around 50bp for the next 12 months”.
“In terms of rate expectations most of the negatives are now priced in for the NOK. However, near-term downside risks prevail for the oil price that should mitigate any sustained NOK rally just yet”.
Key Quotes
“Both EUR/SEK and EUR/NOK bounced on Monday but for different reasons”.
“We see a 50/50 probability that the Riksbank will cut rates on Thursday. At the least, it will be very dovish, likely lowering its inflation forecasts”.
“The ECB will also be dovish on Thursday but we believe that the risks are skewed towards the Riksbank being more dovish than the ECB and hence EUR/SEK squeezing slightly higher”.
“In Norway the market is pricing in around 23bp of cut for the Norges Bank September meeting and around 50bp for the next 12 months”.
“In terms of rate expectations most of the negatives are now priced in for the NOK. However, near-term downside risks prevail for the oil price that should mitigate any sustained NOK rally just yet”.