NORWAY: 2026 Budget Proposal: Key Figures
With the fiscal stance in line with Norges Bank expectations and having an approximately neutral impact on mainland GDP, the market reaction is limited.
- Structural non-oil deficit spending in NOK (current prices): NOK579.4bln vs NOK534.2bln in 2025
- A little above the ~NOK570-573bln estimates we saw from JP Morgan and DNB
- “This includes continued support to Ukraine amounting to NOK 85 billion”
- Structural non-oil deficit spending as a % of Government pension fund assets (fiscal rule stipulates maximum spending of 3% of the GPFG): 2.8% vs 2.7% in 2025
- In line with Norges Bank expectations and the DN report just before 0700BST
- Structural non-oil deficit as a % of mainland GDP: 13.1% vs 12.6% in 2025
- Note this includes support to Ukraine, which totals 1.9% of trend GDP
- Mainland economy fiscal impulse: 0.4pp vs 2.4pp in 2025.
- After accounting for Ukraine support: “Calculations using the KVARTS and NORA macro models indicate that the budget for 2026 will have an approximately neutral effect on activity in the economy next year.”
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GILT TECHS: (Z5) Corrective Bull Cycle Intact
- RES 4: 92.30 High Aug 7
- RES 3: 92.06 High Aug 14
- RES 2: 92.00 Round number resistance
- RES 1: 91.82 High Sep 11
- PRICE: 91.24 @ Close Sep 12
- SUP 1: 90.65 Low Sep 2
- SUP 2: 90.31/89.36 Low Sep 4 / 3
- SUP 3: 89.22 1.618 proj of the Aug 21 - 27 - 28 price swing
- SUP 4: 89.00 Round number support
A bull cycle in Gilt futures remains in play - a recent rally highlights a stronger corrective cycle and the contract is holding on to its gains. The move higher is allowing an oversold trend condition to unwind. Price has breached initial firm resistance at 90.84, the Aug 28 and 29 high. A continuation higher would signal scope for a climb towards 92.06, the Aug 14 high. On the downside, initial support lies at 90.65, the Sep 5 low.
EUROZONE ISSUANCE: EGB Supply (2/2)
- Spain will come to the market on Thursday to hold a Bono/Obli auction. On offer will be the on-the-run 3-year 2.40% May-28 Bono (ISIN: ES0000012O59), the on-the-run 10-year 3.20% Oct-35 Obli (ISIN: ES0000012P33) and the 4.00% Oct-54 Obli (ISIN: ES0000012M93). The auction size will be confirmed today.
- France will come to the market on Thursday, selling a combined E9.5-11.5bln MT OATs with both on the-run issues on offer as we’ve expected: the 2.40% Sep-28 OAT (ISIN: FR001400XLW2) and the 2.70% Feb-31 OAT (ISIN: FR001400Z2L7). Alongside these lines, France will be looking to sell the 0.75% May-28 OAT (ISIN: FR0013286192) and the 3.50% Nov-33 OAT (ISIN: FR001400L834).
- France will return later on Thursday to hold an IL OAT auction, with a combined E1.0-1.5bln of the 2.40% Sep-28 OAT (ISIN: FR001400XLW2), the 2.70% Feb-31 OAT (ISIN: FR001400Z2L7) and the 3.50% Nov-33 OAT (ISIN: FR001400L834) on offer.
NOMINAL FLOWS: This week will see redemptions of E36.1bln, most notably E17.0bln from a German Schatz, E14.0bln from an Italian CCTeu and E5.1bln from a formerly 10-year RFGB. Coupon payments for the week total E4.5bln of which E2.3bln are Italian, E1.0bln German, E0.9bln are Finnish and E0.2bln from the ESM. This leaves estimated net flows for the week at a negative E12.0bln, versus positive E25.4bln last week.
USDJPY TECHS: Monitoring Support
- RES 4: 151.62 61.8% retracement of the Jan 10 - Apr 22 bear leg
- RES 3: 150.92 High Aug 1 and a key resistance
- RES 2: 149.81 76.4% retracement of the Aug 1 - 14 bear leg
- RES 1: 148.58/149.14 High Sep 8 / High Sep 3
- PRICE: 147.48 @ 06:49 BST Sep 15
- SUP 1: 146.21 Low Aug 14
- SUP 2: 145.86 Low Jul 24
- SUP 3: 145.69 Trendline drawn from the Apr 22 low
- SUP 4: 145.40 50% retracement of the Apr - Aug upleg
USDJPY continues to trade inside a range. Key short-term support to watch is 146.21, the Aug 14 low and a bear trigger. A break of this level would highlight a stronger bearish threat and highlight a range breakout. This would expose 145.40, a Fibonacci retracement. On the upside, clearance of 149.14, the Sep 3 high is required to reinstate a bullish theme. Note that moving average studies are in a bull-mode position, highlighting a dominant uptrend.
