NORWAY: April CPI Report Due At 0700BST Tomorrow; June Cut Pricing In Focus
Norwegian April inflation is due tomorrow at 0700BST/0800CET, and may be more of a market mover than today’s Norges Bank decision (though there’s not a very high bar for that to be the case). Markets price a ~50% implied probability of a cut in June (somewhat more dovish than the March MPR rate path), so there is scope for a dovish adjustment in the event of a downside surprise. However, the stickiness of any dovish move may be limited by (i) Norges Bank’s cautious guidance that “the policy rate will most likely be reduced in the course of 2025” and (ii) the amount of time until the June 19 decision, particularly with the May CPI report also due on June 10.
- Norges Bank’s March MPR and analysts expected CPI-ATE inflation at 3.2% Y/Y (vs 3.4% prior).
- The pullback in underlying inflation is expected to be driven by a moderation in the food component, partially linked to the late timing of Easter this year. High food prices have been key in keeping inflation elevated through Q1 2025.
- However, these “Easter effects” are also expected to push up some volatile services components such as airfares.
- See below for a selection of analyst comments:
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SCANDIS: Stabilisation In Risk Sentiment Helps NOK Regain Some Poise
NOK has regained some poise today, with a more stable risk backdrop contributing to a partial unwind of the prior three session’s weakness. EURNOK is down 1.00% to ~11.8600, with the cross now no longer screening as oversold on a 14-day RSI basis. Initial support is the trendline drawn from the August 2024 high (11.7161 today), which had provided solid resistance prior to last Friday’s 3.3% rally.
- Earlier this morning, Norges Bank Governor Bache provided fairly balanced commentary at a Finance Norway conference.
- Her prepared remarks did not suggest the March MPR rate path was out of date following the US tariff announcements, but stressed Norges Bank is “closely monitoring” market developments as always.
- In comments to reporters following the speech, she said that “we are not giving any new monetary policy signals at this time”.
- NOKSEK is up 0.5% to ~0.9215, after failing to close below support at 0.9147 yesterday (76.4% retracement of the March 2020- March 2022 bull leg). Initial resistance is yesterday’s high at 0.9353, but rallies short of the 20-day EMA at 0.9479 will be considered corrective.
- Riksbank speakers Bunge and Thedeen also avoided explicit policy signals in remarks today. However, Thedeen noted that the US tariffs were higher than currently assumed in Riksbank forecasts, and that the central bank is ready to act “forcefully” if needed.
TARIFFS: USTR Greer Testimony To Senate Finance Ctte Underway Shortly
United States Trade Representative Jamieson Greer is shortly due to deliver testimony on the Trump administration’s trade agenda to the Senate Finance Committee. LIVESTREAM Greer will deliver a second testimony to the House Ways and Means Committee tomorrow.
- His is the first Congressional appearance by a relevant administration official since Trump’s April 2 tariff announcement. He is likely to get a robust grilling from Democrats and Republicans alike who want clarity on Trump’s strategy.
- According to prepared remarks, Greer plans to argue that Trump’s tariff strategy is “already bearing fruit," highlighting that, "Nearly 50 countries have approached me to discuss the president’s new policy and explore how to achieve reciprocity,” per Politico.
- Politico notes: “[Finance Committee] Ranking member Ron Wyden [D-OR] plans to slam the administration for offering “no clear message” about how Trump chose his tariff targets and how long he plans to keep them up..." Sen. Bernie Sanders’ message: The blanket tariffs are “illegal and another step toward authoritarianism.””
- Note: President Trump issued a memo yesterday promising to veto legislation introduced by Senators Maria Cantwell (D-WA) and Chuck Grassley (R-IA) that would rein in the president's authority to impose tariffs unilaterally, should it make it to his desk. Both Grassley and Cantwell sit on the panel.
MNI: CANADA MAR IVEY PURCHASING MANAGERS INDEX 51.3 SA
- CANADA MAR IVEY PURCHASING MANAGERS INDEX 51.3 SA
