Erik Johannes Bruce, analyst at Nordea Markets, suggests that Norges Bank will increase the key rate on Thursday and signal a small probability for another hike later in the forecast period, which is hawkish compared to what the market currently expects.

Key Quotes

“Norges Bank will announce its interest rate decision and publish a new rate path on Thursday, 19th September at 10AM. On the contrary to many previous rate meetings, there is high uncertainty this time about the rate decision. Analysts disagree, while the market is currently pricing about 50% probability for a rate hike.”

“Our view – that Norges Bank will hike – is partly based on the signals Norges Bank sent at the in-between meeting in August, where the Bank said that it in the short-term would stick to the latest rate path from June. The June-path gave an 80% probability for a rate hike in September. New information since the meeting in August should not have changed Norges Bank’s view. The domestic picture has not changed much since the August meeting and NOK remains weak. Furthermore, the uncertainty connected to international developments – Brexit and the trade war – has if anything somewhat softened. Hence, Norges Bank will increase its key rate from 1,25% to 1,50% at the meeting on Thursday.”

“Concerning the rate path, our view is based on new information since June and Norges Bank’s reaction function as described in the Monetary Policy Reports. Developments in the domestic real-economy have been very much in line with Norges Bank`s expectations.”

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.

Feed news

Latest Forex News

Editors’ Picks

EUR/USD drops below 1.11 amid upbeat US data, trade concerns

EUR/USD is trading below 1.11 after robust US housing figures and solid consumer sentiment figures were published. Earlier, the common currency suffered from the concerns of new US tariffs on the EU.


GBP/USD down 100 pips after UK retail sales badly disappoint, amid USD strength

GBP/USD has plunged below 1.3050 after UK retail sales badly disappointed with a fall of 0.6% in December, on top of downward revisions. Odds of a BOE cut have risen.


Crypto market hyperspace mode On

The secondary actors of the crypto-sphere awaken and rally hard. Leading coins battle with greater resistance at the gates of a full bullish market. The only risk is an over-shoot, but that sentiment remains neutral.

Read more

Gold looks to close week flat below $1560

The XAU/USD pair climbed to a fresh daily high of $1560 in the early trading hours of the American session but struggled to preserve its momentum.

Gold News

USD/JPY: Losing bullish momentum but retaining gains

Chinese encouraging data kept markets in risk-on mode at the beginning of the day. The US January Michigan Consumer Sentiment Index is seen at 99.3, matching December figure. USD/JPY holding at the upper end of its weekly range could correct lower.