Norges Bank Preview: Unchanged rates and 'on hold' stance to be repeated – Danske Bank
|According to analysts at Danske Bank, Norges Bank is expected to leave the policy rate unchanged at 1.50% and signal unchanged rates for the coming period.
Key Quotes
“We expect no new signals from Norges Bank (NB) at its monetary policy meeting on 23 January. Hence, we expect NB to leave the policy rate at 1.50% and reiterate that rates most likely will remain unchanged in the period ahead. Note that this is an interim meeting with no monetary policy report, rate path or press conference. Indeed in recent years, NB has tended to give very little new information at these interim meetings which fall only one month after the last monetary policy report.”
“At the meeting in December, NB stated that 'the policy rate will most likely remain at this level in the coming period'. Meanwhile, the rate path implicitly suggested a 40% probability of a 2020 hike, highlighting a modest bias towards further tightening.”
“Our base case remains a fifth NB rate hike in 2020 (in June), but the probability of this call materialising has arguably fallen in recent weeks. We estimate a true probability of another NB hike as marginally higher than 50% given the recent news flow. In comparison, markets price roughly 2bp and 5bp worth of cuts (accumulative) for end-2020 and end-2021, respectively. Hence we still see value in positioning for higher short-end rates.”
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.