STIR: BoE Pricing Steady In 40-45bp '26 Cut Range

Overall, the Norwegian November inflation report did not contain much to push Norges Bank off its previously signalled cautious easing path. Although underlying CPI-ATE momentum is likely to ease in the coming months, services inflation remains too sticky for comfort. Focus turns to the Q4 Regional Network Survey tomorrow. 

• On a seasonally adjusted basis using Stats Norway data, Norwegian CPI-ATE inflation rose 0.15% M/M. That follows 0.45% M/M last month and 0.15% the two months prior. 3m/3m annualised momentum was essentially unchanged at 2.81%, but recent sequential readings suggest a moderation is likely in the coming months.
• A pullback in goods and food inflation were key drivers of the NSA CPI-ATE print. These dynamics were largely expected by analysts following a strong October.
• Food inflation fell back to 4.66% Y/Y (vs 6.16% prior), a year-to-date low.
• Domestic goods excluding energy and agricultural products also eased to 3.34% Y/Y (vs 4.92% prior). Similarly, imported goods ex agricultural products fell to 0.95% Y/Y (vs 1.43% prior). Disinflation was noted in furniture and household appliances and an array of recreation and culture goods components.
• Services meanwhile remained elevated at 3.79% Y/Y (unch versus last month). Rents were steady at 3.72% Y/Y while services ex-rent ticked up slightly to 3.92% (vs 3.83% prior). A pullback in accommodation services was offset by restaurants (5.05% Y/Y vs 2.98% prior), but recreation and cultural services displayed a more notable easing (3.76% Y/Y vs 4.22% prior). 

• RES 4: 7000.00 Psychological round number
• RES 3: 6953.75 High Oct 30 and bull trigger
• RES 2: 6918.50 High Oct 31
• RES 1: 6905.00 High Dec 5    
• PRICE: 6853.25 @ 07:26 GMT Dec 10
• SUP 1: 6807.02 20-day EMA  
• SUP 2: 6756.98 50-day EMA 
• SUP 3: 6674.50 Low Nov 25 
• SUP 4: 6525.00 Low Nov 21 and a key support

A bull cycle in S&P E-Minis remains intact and price continues to trade above the 20- and 50- day EMAs. Note that recent gains signal the likely end of the corrective cycle between Oct 30 and Nov 21. A continuation higher would highlight potential for a move towards the key resistance and bull trigger at 6953.75, the Oct 30 high. Key support lies at 6525.00, the Nov 21 low. First support is at 6807.02, the 20-day EMA.

The downtick in the broader USD provides support to EUR/USD through early London trade, with spot firming to 1.1640.

• The bullish technical cycle in the pair remains intact despite the recent consolidation.
• Initial resistance comes in at the 50% retracement of the Sep17-Nov 5 bear leg (1.1694), while support is located at the 20-day EMA (1.1607).
• This morning’s ECBspeak has reaffirmed the idea that the Governing Council deems monetary policy settings to be “in a good place”, despite Executive Board member Schnabel expressing her comfort with markets pricing the next rate move as a hike earlier in the week.
• Broader focus falls on the impending FOMC decision, with consensus looking for a “hawkish cut”.
• Danske Bank note that “EUR/USD has held a tight range this week ahead, with higher U.S. yields offsetting the impact of Schnabel's hawkish remarks. We see the meeting as a modest USD-positive event risk, as it will be hard for the Fed to validate the ~90bp of easing priced into Fed funds futures by early 2027. Notably, each of the five cuts this cycle has seen the USD finish the day flat or stronger versus the EUR, a pattern that could repeat. A deliberately dovish cut looks unlikely, but if delivered would be clearly USD-negative. Into year-end, we think risks lean modestly USD-positive, though EUR/USD could still finish the year near current levels”.