EUR/NOK, EUR/USD flows: NOK little changed after softer CPI

Norwegian CPI data this morning is the only G10 data of note today, and has come in on the soft side of expectations. The chances of a rate hike at the Norges Bank meeting this week were already low, but they are even lower after this data. EUR/NOK is only modestly higher, as there is not much change in rate expectations on the data. NOK/SEK has dipped lower, but still looks too low relative to yield spreads, and we would favour NOK gains from here.

While the USD gained some ground against the JPY and AUD in the Asian session, it was little changed against the EUR, and EUR/USD could play a little catch-up this morning. Yield spreads have continued to push higher, with 2 year spreads at their highest for a year, suggesting we may see some pressure on 1.07.