Norway
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May 3, 2024 8:46 AM UTC
Surprising few, the Norges Bank Board left the policy rate at 4.5% for a third successive meeting at its latest Board meeting. It also retained the thinking first aired at the December meeting, namely ‘policy to stay on hold for some time ahead’ rhetoric, this more formally evident in what wer
April 25, 2024 9:29 AM UTC
Surprising few, the Norges Bank Board is very likely to leave its policy rate at 4.5% for a third successive meeting when it gives it next verdict on May 3. It is also likely to retain the thinking first aired at the December meeting, namely the ‘policy to stay on hold for some time ahead’ rhe
March 22, 2024 11:26 AM UTC
· In the UK, downside economic risks may have dissipated but the tighter monetary stance has far from fully bitten. This accentuates and/or prolongs an already weak domestic backdrop into 2025 that will complement friendlier supply conditions in easing inflation. The BoE will likely e
March 21, 2024 10:10 AM UTC
Surprising few, the Norges Bank Board left the policy rate at 4.5% for a second successive meeting and even retained the thinking first aired at the December meeting, namely the ‘policy to stay on hold for some time ahead’ rhetoric. It accepted a softer recent inflation backdrop but revised up
March 12, 2024 10:26 AM UTC
Unlike, January’s Norges Bank meeting, the decision(s) due on Mar 21 will be far from a non-event. The Board will surely leave rates on hold for a second successive meeting, and may even retain the thinking first aired at the December meeting, namely the ‘policy to stay on hold for some time a
January 25, 2024 9:43 AM UTC
As was very much expected, this month’s Norges Bank meeting was something of a non-event. The Board left rates on hold, and also retained the thinking aired at the December meeting when it hiked rates somewhat surprisingly. There was a repetition of the ‘policy to stay on hold for some time ah
January 18, 2024 9:55 AM UTC
The Jan 25 Norges Bank meeting will be something of a non-event. The Board will leave rates on hold, this widely expected outcome coming after the latest slightly softer than expected but still resilient CPI data (Figure 1) and as-expected GDP numbers since the surprise hike last month. There will
December 15, 2023 2:44 PM UTC
Our Forecasts
Risks to Our Views
Common Themes
There continue to be clear cross currents across Western Europe’s economies that may continue into 2024 and possibly beyond, all inter-related. Firstly, while we have made little alteration to the 2024 outlooks for all four countries, they remain very
December 8, 2023 10:34 AM UTC
U.S. November NFP Likely firmer due to returning strikers
USD/JPY Slumped on Ueda's Speech
Bank of Canada Tightening Bias Persists but is Reduced
USD/CAD Slipping on Weak Oil
RBA Continue to be data dependent
We expect a 200k increase in November's non-farm payroll, stronger than October's 150k though ex
November 2, 2023 9:31 AM UTC
Figure 1: Sizeable Output Gap Emerging
Source: Norges Bank
Policy Considerations
While the Bank suggests that the labour market is still tight, it acknowledges that pressures in the Norwegian economy are easing. It underscores the dilemma central banks obviously face, namely the longer inflation
September 27, 2023 9:50 AM UTC
Our Forecasts
Source: Continuum Economics, Office for National Statistics, Eurostat, Swiss Secretariat for Economic Affairs, Statistics Norway
Risks to Our Views
Source: Continuum Economics
A Riskier Score for 2024
There a several common themes across Western Europe’s economies that are evident at pres
September 21, 2023 9:09 AM UTC
Figure 1: Official Rate Hike Profile Raised
Source: Norges Bank, last two Monetary Policy Reports
Policy Considerations
Evidence that policy tightening is biting is clear most particularly in what are very weak consumer confidence readings which do seem to reflect the impact of the policy rate at a
September 12, 2023 10:11 AM UTC
Figure 1: Official Rate Hike Path to be Retained?
Source: Norges Bank last two Monetary Policy Reports (MPR)
Financial Stability Considerations
Evidence that policy tightening is biting is clear most particularly in what are very weak consumer confidence readings which do seem to reflect the impa
August 17, 2023 9:07 AM UTC
Figure 1: Softer Mortgage Trends
Source: Norges Bank
Financial Stability Considerations Put to One Side
Evidence that policy tightening is biting is clear but hardly sizeable, even though this latest hike took the policy rate to a fresh 15-year high of 4.0% encompassing a 400 bp cumulative hike in the
August 7, 2023 10:52 AM UTC
Figure 1: Even Higher Hiking Path
Source: Norges Bank
Financial Stability Considerations
Evidence that policy tightening is biting is clear but hardly sizeable, even though the hike in June took the policy rate to a fresh 15-year high of 3.75% encompassing a 375 bp cumulative hike in the previous 1
June 22, 2023 12:48 PM UTC
Our Forecasts
Source: Continuum Economics, Office for National Statistics, Eurostat, Swiss Secretariat for Economic Affairs, Statistics Norway
Risks to Our Views
Source: Continuum Economics
Despite the drop in energy prices (which means that the threat of immediate recession has been reduced), it is not
June 22, 2023 9:19 AM UTC
Figure 1: Even Higher Hiking Path
Source: Norges Bank
Notably, the central bank highlighted that Inflation is markedly above the target. It has reservation sin both possible policy directions. If the krone turns out to be weaker than assumed or pressures in the economy persist, a higher-than-pro
June 14, 2023 10:48 AM UTC
Figure 1: Higher Hiking Path Nearly Met?
Source: Norges Bank
Notably, the central bank last month did repeat the projection made in March that the policy rate will reach 3.5% sometime in the summer, this time specifically at the June 22 scheduled Board meeting. Implicitly this will also still poin
March 27, 2023 3:16 PM UTC
Our Forecasts
Source: Continuum Economics, Office for National Statistics, Eurostat, Swiss Secretariat for Economic Affairs, Statistics Norway
Risks to Our Views
Source: Continuum Economics
We still see fully-fledged recessions in all but Switzerland but they are now envisaged to be shallower and shorte
February 22, 2023 10:44 AM UTC
M/T Quick Roadmap – Fundamental MMKT/CB Roadmap and Rationale
February 2023
US FEDERAL RESERVE
The February 1 December FOMC meeting saw the pace of tightening slowed to 25bps. Inflation has slowed, but January's CPI details still show broad based inflationary pressures at a pace well above the Fed's
September 5, 2022 1:21 PM UTC
Market Implications: Market expectations that the ECB will lift the deposit rate to 2% by early 2023 look overdone, as a EZ recession will reduce underlying inflation pressures; labor market flexibility avoids a EZ wage inflation problem and the Euro will likely avoid a downward spiral as fiscal sup
August 26, 2022 9:33 AM UTC
Figure 1: TTF Gas Prices and German Electricity Prices (Aug. 24, 2021 = 100)
Source: Bloomberg, Continuum Economics
Electricity Price Surge for Industry and Households
European industries are starting to balk at the huge surge in electricity prices now and in the near future (Figure 1), with intensiv
July 6, 2022 2:36 PM UTC
Figure 1: G4 10yr Government Bond Yields (%)
Source: Datastream, Continuum Economics
Government Bonds Become Two-way
The one-way upward surge in DM government bond yields has finished for now, and government bond yields are torn between high inflation and slowdown/recession risks (Figure 1). The rece
June 17, 2022 10:16 AM UTC
Our Forecasts
Source: Continuum Economics, Office for National Statistics, Eurostat, Swiss Secretariat for Economic Affairs, Statistics Norway
Risks to Our Views
Source: Continuum Economics
Although rate hiking is now more commonplace, divergent monetary policy backdrops and outlooks among Western Europ