EUR/USD, USD/JPY, EUR/NOK Flows: core NOK CPI a little under, still waiting on Iran
Yen in Fri's bar, still basing and in n/t consolidation/correction mode
Iran says Oman deal close, rhetoric on US demands remains high
NOK inflation higher on headline but a little under on core, Norge hike odds relatively limited for Aug
Yen a touch softer overnight as the main overnight move, but mainly correction/consolidation from the recent basing and action within Fri’s bar. Sep rate hike odds nudge a fraction but still only slightly above 50-50 after the Summary of Opinions. Sep meeting comes down more to the balance of (geo)politics after the recent joint intervention.
In terms of the Strait, Iran says a deal with Oman in the final stages but repeats demands for US to meet various conditions such as compensation and an end to sanctions, so the practicality and stickability of any announcement still a bit of an open question. Oil very much in wait and see.
On the data front this morning, Norway Jul CPI data comes in a bit higher on the headline, at 3% from 2.7% (mkt 2.8%) but a little softer on the core, flat at 2.7% vs 2.8% market and below Norges’ expectations. Odds of a hike at this week’s meeting sit around 10-15%, only fully pricing in another ¼ point by the turn of the year. NOK direction still mainly coming at present from the swings in sentiment in Iran and oil as the main FX proxy.