7 May 2015
Norges Bank surprised markets with unchanged rates – TDS
FXStreet (Edinburgh) - Strategist Jacqui Douglas at TD Securities assessed the recent decision by the Norges Bank to leave rates unchanged today.
Key Quotes
“The Norges Bank kept its policy rate on hold today at 1.25%, while analysts were split 50/50 as to whether we would see a rate cut or not today”.
“On average, it looks like developments since the March meeting have been roughly in line with what the Norges Bank had expected, with better outcomes for oil prices and household goods consumption, but softer outcomes for foreign output and LFS unemployment”.
“While we had expected a rate cut today, that was always a close call, and we’ve now pushed back our rate cut call to the June meeting instead. We believe that the Norges Bank should have cut rates today (and in fact should have probably cut rates in March), given that monetary policy operates with a lag”.
“We think that the macro data should be soft enough to get that next rate cut in, but as always with Norway, it’s not a certain call, so we may see a little more market volatility around any substantial Norwegian macro surprises between now and the next rate decision and MPR on 18 June”.
Key Quotes
“The Norges Bank kept its policy rate on hold today at 1.25%, while analysts were split 50/50 as to whether we would see a rate cut or not today”.
“On average, it looks like developments since the March meeting have been roughly in line with what the Norges Bank had expected, with better outcomes for oil prices and household goods consumption, but softer outcomes for foreign output and LFS unemployment”.
“While we had expected a rate cut today, that was always a close call, and we’ve now pushed back our rate cut call to the June meeting instead. We believe that the Norges Bank should have cut rates today (and in fact should have probably cut rates in March), given that monetary policy operates with a lag”.
“We think that the macro data should be soft enough to get that next rate cut in, but as always with Norway, it’s not a certain call, so we may see a little more market volatility around any substantial Norwegian macro surprises between now and the next rate decision and MPR on 18 June”.