NORGES BANK: Bache: Uncertainty Is Why Scenarios Are Not Published
Question from MNI at the Norges press conference: Given the uncertainty around the impact of tariffs, have you made any progress on alternative scenario analysis to give us an alternative rate path?
A: We have been discussing the impact of tariffs at length, but there is still extensive uncertainty on what measures will be introduced and the likely responses.
- Our best assessment is what has been announced so far will have a negative impact on global growth (which has been accounted for in our forecasts), but we haven’t made any big changes to our inflation forecast yet. So far, we believe the impact on the Norwegian economy are limited.
- We stress the high uncertainty. If we see more extensive restrictions, that could have a dampening effect on the global economy, and a more direct effect on the Norwegian economy. But the interest rate outlook is uncertain because in that scenario you could also see higher price inflation.
- We don’t publish any specific scenarios because of that uncertainty.
Note the clear difference in approach between the Norges Bank and Riksbank here. The Riksbank also stresses the high current uncertainty, but published two alternative scenarios in last week’s March MPR (one “dovish”, one “hawkish”) to illustrate potential policy responses.
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COMMODITIES: Fresh Short-Term Cycle Lows in WTI Futures Reinforces Bearish Theme
A bearish theme in WTI futures remains intact and the move lower last week, and Monday’s fresh short-term cycle low, reinforces a bear condition. Support at $70.20, the Feb 6 low, has been pierced. A clear break of it would strengthen the downtrend and confirm a breach of the 50-day EMA. This would open $67.75, the Dec 20 ‘24 low. Key S/T resistance has been defined at $74.06, Feb 3 high. A move above this level would reinstate a bull theme. A bull cycle in Gold remains in play and the yellow metal continues to trade at its latest highs. Fresh cycle highs once again confirm a resumption of the uptrend and maintain the bullish price sequence of higher highs and higher lows. Moving average studies are in a bull mode position too, highlighting a dominant uptrend. Sights are on the $2962.2, a Fibonacci projection. The first key support to watch is $2875.2, the 20-day EMA.
- WTI Crude up $0.12 or +0.17% at $70.84
- Natural Gas up $0.01 or +0.18% at $4.001
- Gold spot down $11.78 or -0.4% at $2940.65
- Copper down $1.2 or -0.26% at $455.1
- Silver down $0.15 or -0.46% at $32.207
- Platinum down $0.48 or -0.05% at $969.5
EQUITIES: Recent Move Lower in E-Mini S&P Considered Corrective For Now
The trend condition in the Eurostoxx 50 futures contract remains up and last week’s climb to a new alltime high on the continuation contract, reinforces a bull theme. Note too that moving average studies are in a bull-mode set-up, highlighting a dominant uptrend and positive market sentiment. Sights are on 5574.57 next, a Fibonacci projection. Initial firm support to watch is 5387.59, the 20-day EMA. A pullback would be considered corrective. S&P E-Minis traded lower again, on Monday. The move down appears corrective, however, price has breached support at 6014.00, the Feb 10 low. This signals scope for a deeper retracement and has exposed a key support at 5935.50, the Feb 3 low. Moving average studies remain in a bull-mode condition that suggests the trend direction remains up. A resumption of gains would refocus attention on key resistance at 6178.75, the Dec 6 ‘24 high.
- Japan's NIKKEI closed lower by 539.15 pts or -1.39% at 38237.79 and the TOPIX ended 11.83 pts lower or -0.43% at 2724.7.
- Elsewhere, in China the SHANGHAI closed lower by 26.988 pts or -0.8% at 3346.04 and the HANG SENG ended 307.59 pts lower or -1.32% at 23034.02.
- Across Europe, Germany's DAX trades higher by 38.35 pts or +0.17% at 22463.07, FTSE 100 higher by 31.4 pts or +0.36% at 8689.76, CAC 40 up 8.76 pts or +0.11% at 8097.74 and Euro Stoxx 50 down 0.24 pts or 0% at 5453.06.
- Dow Jones mini down 9 pts or -0.02% at 43523, S&P 500 mini down 7.25 pts or -0.12% at 5993, NASDAQ mini down 62.75 pts or -0.29% at 21354.25.
US-RUSSIA: Kremlin Talks Up Cooperation w/US, EU Enters UKR Minerals Discussion
Reuters reporting comments from Kremlin spokesperson Dmitri Peskov - speaking at his daily presser. Peskov said, addressing remarks from Russian President Vladimir Putin yesterday, hinting that Russia could work with US companies to mine rare-earth minerals in Ukraine: “Russia says it has its own plans to develop them but is open to cooperation.”
- Putin said, in an apparent reference to Ukraine yesterday: “Russia is one of the leading countries when it comes to rare metal reserves... as for new territories, we are also ready to attract foreign partners – there are certain reserves there too,”
- Putin's comments came after US President Donald Trump issued a statement on Truth Social claiming he is in “serious discussions” with Putin on “major Economic Development transactions”.
- The comments could undermine a White House assertion that a mineral deal with Kyiv would lead to a US commercial presence in Ukraine - serving as a non-military security assurance. Any sign of a US-Russia deal to share in Ukraine’s resource wealth is likely to imperil talks to end the war.
- Peskov reiterated that Russia considers European peacekeepers in Ukraine “unacceptable”, after Trump affirmed yesterday that he supports a European peacekeeping operation: “I think that will be a very good day, when we can go in as peacekeepers as opposed to what's going on right now…”
- Peskov noted US opposition to a UN resolution condemning Russia’s invasion of Ukraine, positing that the “European stance on Ukraine may become more balanced as a result of contacts with the US.”
- Yesterday, the EU submitted a competing mineral deal to Ukraine, pitched by Europe's Commissioner for Industrial Strategy Stéphane Séjourné as a "win-win partnership".
