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  • NOK eyes Norges Bank rate decision, commentary – expected hold on rates
  • Swedish Krona will be waiting for speech from Riksbank’s Kerstin Jochnick
  • How will global sentiment, crude oil prices impact Norway monetary policy?

See our free guide to learn how to use economic news in your trading strategy!


Norwegian Krone traders will be eagerly waiting for the Norges Bank rate decision and commentary. Analysts are expecting for the central bank to hold the benchmark rate at 1.00 percent after officials raised rates at the last policy meeting and surprised global markets.Year to date, it remains one of the most hawkish central banks in most OECD economies, though that may change soon.

The recent deterioration in US-China trade talks may be a catalyst for a reversal of risk appetite which may end up pressuring sentiment-linked commodities and cycle-sensitive currencies. The Norwegian economy is built on the petroleum sector, and as such, it relies on healthy global demand against the backdrop of an appetite for risk taking. The US-China trade war has been cited as the leading cause of global deceleration.

A fallout in negotiations has substantial implications for the global outlook. The violent market reaction to the news in large part came from the incongruity between the belief that talks were going well and the actual reality. Global PMIs have been showing weakness while most central banks in developed economies have pushed back their rate hike cycle amid the uncertainty.

One of these central banks has been the ECB which introduced new liquidity provisions and a gloomy outlook at the March 7 meeting. Slower growth out of Europe is a key concern for Nordic economies due to their reliance on strong European demand. The EU is Norway’s biggest client, with over 80 percent of the Scandinavian country’s exports headed to what is now a cooling economic region.

Yesterday, the EU slashed German GDP growth forecasts down to 0.5 percentwith the country’s month-on-month factory orders substantially missing their 1.4 percent estimate, coming in at 0.6 percent. Slower growth out of Europe and Germany has significant implications for the Norwegian economy and NOK because both the currency and underlying economic activity is in large part tied to the resilience of crude oil prices.


Meanwhile, SEK traders will be waiting for First Deputy Governor of the Riksbank Kerstin af Jochnick. This follows the release of the central bank’s release of April 24 meeting minutes. The publication revealed that policymakers want to proceed cautiously amid concerns of uncertainty over the future of global economic activity and the “strongly exposed” Swedish economy.

The majority of the members also considered it appropriate to maintain the level of the Riksbank’s holdings of government bonds and therefore to buy government bonds at a nominal amount of SEK 45 billion from July 2019 to December 2020.” However, this decision was not met with unanimous agreement particularly from Deputy Governors Martin Floden and Henry Ohlsson who were skeptical of the additional measures.

The minutes also revealed that policymakers believe the current situation is “fragile” and that any more downward revisions of forecasts would be reflected with an adjustment in monetary policy. Prevailing trends in global sentiment and European economic activity will likely continue to drive price action in the Swedish Krona and Norwegian Krone.


Chart Showing Crude Oil Prices


--- Written by Dimitri Zabelin, Jr Currency Analyst for

To contact Dimitri, use the comments section below or @ZabelinDimitrion Twitter