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11 Dec 2014
Norges Bank may keep rates on hold – TDS
FXStreet (Barcelona) - Annette Beacher, Head of Asia-Pacific Research at TD Securities, expects Norges Bank to keep the rates on hold as the depreciating NOK might add 60-80 bps to the policy rate profile in the year ahead.
Key Quotes
“The Norges Bank decision is turning out to be interesting with a wide range of opinions as to where Norwegian rates are heading over the next 6 months. We’re in line with consensus for the Bank to remain on hold, but the door to easing to creep open via policy rate forecasts through H1 2015. However, markets have moved quite a bit further than the analyst community and expect about -10bps of cuts today and -50bps over the next 6 months.”
“We don’t think that the Norges Bank will need to cut as the unexpected NOK depreciation should add about 60-80bps to the policy rate profile one year ahead, which will go a long way in balancing the drop in crude oil prices and lower growth forecasts. So with no rate cut this week, and no clear hints of cuts to come at the next policy meeting in March, we think that markets will have to pare back on some of the easing priced, and we like reflecting this through selling CADNOK.”
Key Quotes
“The Norges Bank decision is turning out to be interesting with a wide range of opinions as to where Norwegian rates are heading over the next 6 months. We’re in line with consensus for the Bank to remain on hold, but the door to easing to creep open via policy rate forecasts through H1 2015. However, markets have moved quite a bit further than the analyst community and expect about -10bps of cuts today and -50bps over the next 6 months.”
“We don’t think that the Norges Bank will need to cut as the unexpected NOK depreciation should add about 60-80bps to the policy rate profile one year ahead, which will go a long way in balancing the drop in crude oil prices and lower growth forecasts. So with no rate cut this week, and no clear hints of cuts to come at the next policy meeting in March, we think that markets will have to pare back on some of the easing priced, and we like reflecting this through selling CADNOK.”