NORGES BANK: Norges Bank Announces NOK Purchases To Limi Reserve Expansion
"Norges Bank to purchase NOK and sell foreign currency to fund transfers to the government"
Not a massive surprise, this policy was introduced last year as a way of managing the level reserves in the banking system. Beforehand, The government used to issue debt to sterilise increases in reserves caused by FX reserve holding appreciation.
- These expected transfers should already be embedded in market expectations for total Norges Bank FX market activity next year. However, the NOK10bln interest payment for 2025 may add a small upside risk to daily NOK purchase expectations.
From the press release
"The earnings for 2025 and the associated transfer of dividends from the transfer fund are set in Norges Banks annual financial statements, which will be published in February 2026. The earnings as of November 2025 indicate that the transfer will amount to around NOK 20 billion. In addition, interest payments for 2025 are estimated at around NOK 10 billion"
"The NOK purchases will be evenly distributed over the period between March 2025 and February 2026. The transactions will be executed on the trading days on which Norges Bank carries out foreign exchange transactions on behalf of the government. NOK purchases to fund transfers to the government and foreign exchange transactions on behalf of the government will be executed in the market as a daily net amount."
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GILT SYNDICATION: 1.75% Sep-38 linker: Books Open
- Size: GBP Benchmark (MNI expects GBP GBP4.5-5.5bln)
- Guidance: UKTi 1.125% 22-Nov-2037 (GB00B1L6W962) +10.50/+10.75bps
- Maturity: 22 September 2038
- ISIN: GB00BMY62Z61
- Benchmark: UKTi 1.125% 22-Nov-2037 (GB00B1L6W962)
- Coupon: 1.75% Semi Annual, ACT/ACT
- Expected Settlement Date: 13-November-2025 (T+1)
- Current O/S : £5.5bln
- JLMs: GSIB (B&D/DM) / JPM / NOMURA / SANTANDER
- Timing: Books open, today’s business
Source: Market source and MNI colour
GBP: Spot Slips on Growing Political Risk, Underperformance in UK Bonds
GBP weakness does coincide with Streeting's comments being more widely circulated in UK media e.g. Here: https://www.telegraph.co.uk/politics/2025/11/12/politics-latest-news-keir-starmer-leadership-challenge-pmqs/ but nothing particularly new after his appearance on the BBC this morning.
- No real standout volumes on the move: GBP futures activity has picked up, but not notably - suggesting price action here may not be tied to sizeable flow. The more gradual nature of the move in spot also supports this.
- Move in GBP may instead be fix related into 9am - or tied to the underperformance in Gilt markets relative to broader European bonds.
- GBPUSD has stabilised just above the new daily low of 1.3115.
GILTS: Leading The Wider Sell Off
Gilts lead the sell off in core global FI markets this morning.
- A reminder that this comes after Tuesday’s outperformance in the wake of weak UK labour market data and key resistance holding in futures.
- Rumours surrounding a potential leadership challenge within the ruling Labour Party, presence of syndicated gilt supply (albeit I/L) and the bid in equities (gilts having a higher beta than Bunds) seem to be the driving factors.
