Norges Bank will announce its rate decision on Thursday, 20 January at 10.00 CET. Analysts at Nordea Markets offered a brief preview of the event and expect that the key rate will be on hold at 0.5 per cent.
Key Quotes:
“The interim meetings at Norges Bank are usually dull events, and this time will be no different. In the press release, the central bank will only describe the main developments since the previous meeting vis-a-vis their expectations from December, without concluding on the effects on the rate path.”
“The developments since December have so far been better than expected by the central bank, while the NOK is in line. Although Norges Bank will not conclude on the effects on the rate path, our own assessment is that the sum of news warrants a higher rate path vis-a-vis the rate path from December (supporting our long-held view for four rate hikes this year).”
“Overall, we expect that the Committee will reiterate their message from December: “Based on the Committee’s current assessment of the outlook and balance of risks, the policy rate will most likely be raised further in March”. Market forward rates are currently priced broadly in line with the rate path from Norges Bank so market reactions should thus be muted.”