Norges Bank planning to hike rates – Danske Bank

Piet P. H. Christiansen, senior analyst at Danske Bank, notes that yesterday’s Norges Bank (NB) announcement clearly shows that NB stands out as the only G10 central bank planning to hike rates in the coming months.

Key Quotes

“As we approach March, the repricing of the short-end (if global risk holds up as we expect) should underpin a stronger NOK on both carry level and carry momentum.”

“We still pencil in a stronger NOK in coming months, primarily on (1) relative growth and relative rates, (2) tighter structural liquidity and (3) global risk appetite and higher oil. We remain short EUR/NOK via options and long NOK/SEK spot outright.”