TURKEY: Inflation Estimates Rise in CBRT's Latest Survey of Market Participants

Full details of Norway’s 2026 budget proposal have been released. A reminder that the Government will spend 2.8% of total pension fund assets next year, which was in line with analyst and Norges Bank expectations. This is estimated to provide a broadly neutral fiscal impulse of 0.1pp towards mainland GDP next year.

Summary of some of the proposed polices (many of which were as expected).

• “The Government proposes to reduce income tax by more than NOK 4 billion by, among other things, increasing the personal allowance and reducing National Insurance on wages, benefits and business income.”
• “In total, the Government proposes to allocate NOK 11.5 billion to Norway’s Price electricity support scheme and the household electricity subsidy programme. Further, we propose to reduce electrical power tax by NOK 4 billion.”
• This was already known: “The Government proposes that families should pay a maximum fee of NOK 1,200 per month for a kindergarten spot”
• “Norway will in 2026 also provide military and civilian support to Ukraine through the Nansen programme. The Government proposes a total of NOK 85 billion in 2026 – the same as in 2025.”
• “The Government proposes to increase the defence budget in line with the long-term plan for the defence sector. This entails NOK 4.2 billion in increased funding. In total, it is estimated that defence expenditure will amount to 3.4 per cent of the gross national product (GDP) in 2026. “
• “The Government proposes to increase carbon taxes by 14 per cent in 2026 in line with the plan to increase the general level to NOK 2,400 per tonne of CO2 in 2030 (measured in 2025 prices). “

NATO defence ministers are meeting at the alliance's HQ in Brussels. Speaking on 14 Oct, US President Donald Trump raised again the potential sale of Tomahawk missiles, which could strike deep into Russia, to Kyiv. Trump hosts President Volodymyr Zelenskyy at the White House on 17 Oct, claiming “He would like to have Tomahawks...We have a lot of Tomahawks.” Russian President Vladimir Putin said the sale of Tomahawks, capable of carrying a nuclear warhead and capable of reaching Moscow, would mark a “qualitatively new stage of escalation.” In order to fire the Tomahawks, the US would need to provide Ukraine with Typhon launchers.

• Regarding Russian aerial incursions, an aim of today's meeting is to get clarity on ‘national caveats’, which dictate how the Supreme Allied Commander Europe can respond to immediate threats using NATO troops from various countries.
• Secretary General Mark Rutte will hold a post meeting presser at 14:15CET (08:15ET, 13:15BST), livestream here.
• After a meeting of the ~50-nation Ukraine Defence Contact Group at 15:00CET, Ukrainian Minister of Defence Denys Shmyhal will hold a presser with Rutte at 17:00CET (11:00ET, 16:00BST) and then with the hosts of the UDCG, the British and German defence ministers, at 17:40CET.
• Finally, EU defence ministers will have an informal meeting at 19:00CET (13:00ET, 18:00BST), with the main topic of discussion being the EU's 'Readiness 2030' plans, which include the EUR150bln SAFE loans scheme to boost defence spending by member states. 

Long end swap spreads lead the widening on the UK curve this morning, seemingly driven by spill over from Fed Chair Powell signalling the potential end to QT in the “coming months”.

• 30-Year swap spreads ~1.5bp wider vs. closing levels, while 2- & 5-Year spreads are closer to 0.5bp wider on the day.