NOK flows: NOK resilient after slightly softer CPI

EUR/NOK initially blipped slightly higher after this morning’s Norwegian CPI data, which came in slightly weaker than expected, but has quickly reversed gains and now sits 3 figures lower than opening levels. The lower than expected CPI number might marginally increase the prospects of Norges Bank easing this year, but this doesn’t change the fact that the NOK looks too weak relative to yield spread moves given the relative hawkishness of Norges Bank. The weakness is perhaps most obvious against the SEK, but is also evident against the EUR. The NOK continues to struggle with other commodity currencies whenever there is any weakening in risk sentiment, but has also struggled to make gains in risk recoveries. Nevertheless, EUR/NOK levels near 12 look overextended, and NOK/SEK looks notably cheap at 0.96.