HALISTER1: Norges Bank on Hold This Week, 50% Chance of 2016 Easing: Danske

Norges Bank on Hold This Week, 50% Chance of 2016 Easing: Danske

(Bloomberg) -- Expect an unchanged policy announcement from Norges Bank on Sept. 22 and an upward revision to the central bank’s rate path, although it will probably still show a 50% chance of a cut before year-end, Danske Bank chief analyst Arne Lohmann Rasmussen writes in a client note.
  • Clear signs now that growth in Norway’s economy is picking up; risk of deeper, protracted downturn has decreased greatly since Norges Bank announcement in June
  • Additionally, housing market has tightened considerably over the summer
  • This means further rate cut is no longer necessary due to growth concerns and less desirable given housing-market dynamics
  • Inflation has also been higher than expected
  • High Nibor premiums and relatively strong NOK mean a 2016 cut can’t be ruled out
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

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1037Z NO (Norges Bank)

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Arne Rasmussen (Danske Bank A/S)

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