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15 May 2015
Norges Bank expected to cut rates in June – HSBC
FXStreet (Edinburgh) - Analysts at HSBC believe the Norges Bank could finally cut rates at its June meeting, although the impact on NOK should be limited.
Key Quotes
“The Norges Bank kept rates on hold at 1.25% at its meeting on 7 May. The consensus on the decision was split, but as in March the bank stated that it would cut the policy rate in Q2 (i.e. at either the May or June meeting) if the economy progressed as expected”.
“The statement attached to the decision says that economic activity has been in line with the March projections, but struck a more hawkish tone with the language changed to say that a June rate cut remains a possibility rather than a certainty”.
“The Norges Bank said that the risks of a pronounced downturn have diminished and household debt remains buoyant”.
“A rate cut is to be expected and should not cause the currency to weaken in any meaningful way. On the positive side the oil price has bounced back and although the direct linkages to the exchange rate are poor, its linkage to investor confidence in Norway is strong”.
Key Quotes
“The Norges Bank kept rates on hold at 1.25% at its meeting on 7 May. The consensus on the decision was split, but as in March the bank stated that it would cut the policy rate in Q2 (i.e. at either the May or June meeting) if the economy progressed as expected”.
“The statement attached to the decision says that economic activity has been in line with the March projections, but struck a more hawkish tone with the language changed to say that a June rate cut remains a possibility rather than a certainty”.
“The Norges Bank said that the risks of a pronounced downturn have diminished and household debt remains buoyant”.
“A rate cut is to be expected and should not cause the currency to weaken in any meaningful way. On the positive side the oil price has bounced back and although the direct linkages to the exchange rate are poor, its linkage to investor confidence in Norway is strong”.