NOK: Quick Snap Weaker With Norges Bank Becoming Net Sellers Again In Nov
Oct-31 09:09
Norges Bank FX Purchases For November:
"In November 2025, the daily net purchases of foreign exchange for these purposes will amount to NOK 24 million. The net amount arises from Norges Bank needing to purchase foreign currency equivalent to 150 million NOK per day on behalf of the government while simultaneously needing to sell foreign currency equivalent to 126 million NOK per day to fund the transfer of dividends to the government."
- Quick snap weaker for NOK on the release - this is the first time Norges Bank will be net buyers of foreign exchange (i.e. Sellers of NOK) since March 2025.
- The moves in NOKSEK and EURNOK have already mostly faded though.
- The amount of NOK being sold in November is still immaterial, and in any case, Norges Bank are expected to be larger net purchasers of NOK next year (around NOK600-800mln/day based on our own and analyst estimates).
- However, we caution that larger Norges Bank NOK FX purchases don't necessarily imply more aggregate NOK demand.
- One reason why Norges Bank FX purchases are expected to increase next year is because tax revenues from petroleum companies are expected to fall (implying less conversion of FX revenues into NOK for tax paying purposes).
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EUROPEAN INFLATION: HICP broadly in line with consensus: The breakdown
Oct-01 09:08
- Eurozone HICP came in at a little below the MNI tracking of 2.3% with 2-way risks at 2.23%Y/Y, but broadly in line with the market consensus.
- Core and services both rounded down to consensus expectations, although core at 2.35%Y/Y was almost 2.4%.
- It appears as though FAT (food, alcohol and tobacco) is the only notably surprise, coming in softer than expected at 3.04%Y/Y (down from 3.19%Y/Y where it was expected to remain).
- No substantial market reaction, given that the data was broadly in line with expectations.
SWITZERLAND DATA: August Retail Sales Weak But Broader Picture Solid So Far
Oct-01 09:06
Swiss (real) retail sales were rather weak in August on a sequential comparison, at -0.2% M/M.
- Looking at the drivers of the release shows that weakness was centred in the "remaining" category (which contains a lot of durable goods, table below). The August data was the first incorporating the 39% US tariffs levied on Swiss goods. The question is if this filtered through to consumer scepticism here already.
- However, on a broader 3-month moving average of the Y/Y measure, Swiss retail sales continue to grow around their long term average rate, at a current 1.5% (1.6% July).
- This means the big picture is that the Swiss consumer overall continues to screen healthy. However, we watch for potential signs of a cooling of the propensity to consume going forward.
EGB FUNDING UPDATE: Ireland To Hold 1 Bond Auction In Q4
Oct-01 09:04
- NTMA has confirmed that it will hold one auction in Q4-25, on Thursday 9 October. Details will be confirmed on Monday 6 October.
- We had pencilled in 0-1 auctions, but think that the market was looking for no more auctions this year given that the NTMA did not hold any auctions in Q4 in each of 2022, 2023 and 2024 after reaching the bottom of the funding target range.
