NOK flows: NOK softer after weaker CPI

The NOK has fallen back after much weaker than expected June CPI data. CPI came in at 2.6% y/y headline and 3.4% y/y core, against the 2.9% and 3.6% consensus. This will increase expectations of Norges Bank easing, with the market now leaning towards a rate cut by year end. Even so, yield spreads still look supportive for the NOK, which has underperformed yield spread moves all year. So we would be wary of following the NOK move lower. NOK/SEK continues to look to have potential for a move above parity, and EUR/NOK looks toppy at 11.50.