Western Europe Outlook: Price Pressures - Puzzling or Possibly Persistent!

March 25, 2025 10:47 AM UTC

·       In the UK, we continue to retain our below-consensus GDP picture for this year, with growth actually downgraded and with downside risks that may actually be both increasing and materializing. The BoE will likely ease further through 2025 by at least 75 bp and maybe faster and into 202

Norges Bank Preview (Mar 27): No Change but a Close Call?

March 20, 2025 3:56 PM UTC

Norway sees the widely awaited Norges Bank decision later this month where recent inflation data have questioned whether the well flagged rate cut will now be delivered – we think the decision may be more finely balances that many are suggesting not least as economic activity signs are mixed even

Norges Bank Review: Nothing New as Head Stays in the Sand

January 23, 2025 9:48 AM UTC

In its first meeting of the year, the Norges Bank kept rates on hold in what was both an expected and unanimous Board decision.  But calling this a decision is possibly a misnomer as nothing was actually decided over and beyond waiting for new information and updated forecasts by the time of the ne

Norges Bank Preview (Jan 23): A Message to Markets?

January 17, 2025 1:15 PM UTC

In its first meeting of the year, the Norges Bank is expected to keep rates on hold next Thursday.  But it does have the choice of cutting rates, having flagged a move more likely at the meeting due in March, and could do this both to reflect weaker price pressures (especially excluding what are pr

Western Europe Outlook: Divergent Policy Thinking

December 19, 2024 2:12 PM UTC

·       In the UK, perhaps the main story in our outlook is that we retain our below-consensus GDP picture for next year, with growth of 1.0% and with downside risks. The BoE will likely ease further through 2025 by at least 100 bp and maybe faster and beyond. 
·       As for Sweden, d

Norges Bank Review: Caution Prevails

December 19, 2024 10:21 AM UTC

Surprising no-one, another (ie eighth successive) stable policy decision was forthcoming at this latest Board decision so that the policy rate at 4.5% has been in place for a year.  The statement was more open about policy being eased but only after two more meetings, so that the first cut will com

Norges Bank Preview (Dec 19): Still Resistant

December 10, 2024 11:28 AM UTC

Despite what seems to be an accelerated pace of central bank easing nearby, speculation that the Norges Bank would ease by year –end had grown, but have now largely dissipated.  What seems to be the final nail in the coffin of a rate cut has been the November CPI numbers, higher than consensus bu

Norges Bank Review: A Tweak in Policy Guidance

November 7, 2024 9:29 AM UTC

Aided by more downside inflation surprises and the accelerated pace of central bank easing nearby, speculation that the Norges Bank would ease by year –end had grown, but have now largely dissipated.  However, after the widely expected stable policy decision today, the possibility that a cut may

Norges Bank Preview (Nov 7): Options A Little More Open?

October 28, 2024 1:14 PM UTC

Aided by more downside inflation surprises and the accelerated pace of central bank easing nearby, speculation that the Norges Bank would ease by year –end had grown, but now largely dissipated.  The Bank has two policy meeting left this year – Nov 7 and Dec 19- but has offered no encouragement

Western Europe Outlook: Gradualism vs Reality

September 26, 2024 10:45 AM UTC

·       In the UK, while headline GDP numbers look firmer, the real economy backdrop and outlook remains no better than mixed.  This should improve a disinflation process driven mainly by friendlier supply conditions. The BoE will likely ease in Q4 and continue doing so through 2025 (we look

Norges Bank Review: Heads Still in the Sand?

September 19, 2024 8:57 AM UTC

As with the five previous policy meetings, the Norges Bank kept its policy rate at 4.5% and equally unsurprising moderated its previous hawkish rhetoric - slightly. While it still fought against market expectations by suggesting policy will remain on hold until year end it did drop its recent stress

Norges Bank Preview (Sep 19): Less Hawkish Rhetoric?

September 10, 2024 7:37 AM UTC

As has been the case for the five previous policy meetings, the Norges Bank is almost certain to keep its policy rate at 4.5% when the Board offers its next verdict on Sep 19.  But amid a slightly disappointing mainland real economy backdrop and what have been softer than (Norges Bank) expectations

Norges Bank Review: Head in the Sand?

August 15, 2024 9:44 AM UTC

Surprising few, and with no mention of recent stock market gyrations, the Norges Bank is kept its policy rate at 4.5% for a fifth successive meeting this month, the last hike to the current 4.5% policy rate occurring last December.  But amid what have been softer than (Norges Bank) expectations for

Norges Bank Preview (Aug 15): Less Hawkish?

August 9, 2024 10:00 AM UTC

Given its recent rhetoric and currency concerns, and in spite of current stock market gyrations, the Norges Bank is very likely to leave its policy rate at 4.5% for a fifth successive meeting next Thursday, the last hike to the current 4.5% policy rate occurring last December.  But amid what have b

Western Europe Outlook: Easing Cycles Diverge?

June 24, 2024 7:48 AM UTC

·       ·       In the UK, while downside economic risks may have dissipated, the real economy backdrop and outlook is still no better than mixed.  This should accentuate a disinflation process hitherto driven mainly by friendlier supply conditions. The BoE will likely ease in Q3 and

Norges Bank Review: Excessive Last Mile Caution?

June 20, 2024 9:04 AM UTC

It was always the very high likelihood that the thrust of recent data and the Board’s clear caution would mean that the Norges Bank would leave its policy rate at 4.5% for a fourth successive meeting and this is what duly occurred.  Perhaps more notable was that the it was more explicit in stress

Norges Bank Preview (Jun 20): Continued Caution?

June 13, 2024 9:25 AM UTC

Given the thrust of recent data and the Board’s clear caution, the Norges Bank is very likely to leave the policy rate at 4.5% for a fourth successive meeting at its next Board meeting with the decision due on June 20.  It is also likely to retain the thinking first aired at the December meeting,

Norges Bank Review: Even More Caution?

May 3, 2024 8:46 AM UTC

Surprising few, the Norges Bank Board left the policy rate at 4.5% for a third successive meeting at its latest Board meeting.  It also retained the thinking first aired at the December meeting, namely ‘policy to stay on hold for some time ahead’ rhetoric, this more formally evident in what wer

Norges Bank Preview: Nothing New to Note?

April 25, 2024 9:29 AM UTC

Surprising few, the Norges Bank Board is very likely to leave its policy rate at 4.5% for a third successive meeting when it gives it next verdict on May 3.  It is also likely to retain the thinking first aired at the December meeting, namely the ‘policy to stay on hold for some time ahead’ rhe

Western Europe Outlook: Easing Cycle Underway?

March 22, 2024 11:26 AM UTC

·        In the UK, downside economic risks may have dissipated but the tighter monetary stance has far from fully bitten. This accentuates and/or prolongs an already weak domestic backdrop into 2025 that will complement friendlier supply conditions in easing inflation. The BoE will likely e

Norges Bank Review: Unrevised Rate Cutting Hints?

March 21, 2024 10:10 AM UTC

Surprising few, the Norges Bank Board left the policy rate at 4.5% for a second successive meeting and even retained the thinking first aired at the December meeting, namely the ‘policy to stay on hold for some time ahead’ rhetoric.  It accepted a softer recent inflation backdrop but revised up

Norges Bank Preview: Clearer Rate Cutting Hints?

March 12, 2024 10:26 AM UTC

Unlike, January’s Norges Bank meeting, the decision(s) due on Mar 21 will be far from a non-event.  The Board will surely leave rates on hold for a second successive meeting, and may even retain the thinking first aired at the December meeting, namely the ‘policy to stay on hold for some time a

Norges Bank Review: Policy Unchanged, Rhetoric Unchanged

January 25, 2024 9:43 AM UTC

As was very much expected, this month’s Norges Bank meeting was something of a non-event.  The Board left rates on hold, and also retained the thinking aired at the December meeting when it hiked rates somewhat surprisingly. There was a repetition of the ‘policy to stay on hold for some time ah

Norges Bank Preview (Jan 25): Marking Time

January 18, 2024 9:55 AM UTC

The Jan 25 Norges Bank meeting will be something of a non-event.  The Board will leave rates on hold, this widely expected outcome coming after the latest slightly softer than expected but still resilient CPI data (Figure 1) and as-expected GDP numbers since the surprise hike last month. There will

Western Europe Outlook: Inflation Succumbing?

December 15, 2023 2:44 PM UTC

·        In the UK, downside economic risks may still be materializing as the tighter monetary stance has far from fully bitten. This accentuates and/or prolongs an already negative domestic backdrop that may now stretch into 2025. The BoE has already paused and will likely ease next year an

This week's five highlights

December 8, 2023 10:34 AM UTC

U.S. November NFP Likely firmer due to returning strikers
USD/JPY Slumped on Ueda's Speech
Bank of Canada Tightening Bias Persists but is Reduced
USD/CAD Slipping on Weak Oil
RBA Continue to be data dependent
We expect a 200k increase in November's non-farm payroll, stronger than October's 150k though ex

Western Europe Outlook: Policy Peaking

September 27, 2023 9:50 AM UTC

Forecast changes: Compared to our June Outlook, GDP growth forecasts have again seen mixed developments, slightly less poor for the UK and Norway for this year, but with 2024 downgrades seen across the board. But it is the upgraded current year inflation projections that explain the more significant

Western Europe Outlook: Consumer Fragilities Persist

June 22, 2023 12:48 PM UTC

Forecast changes: Compared to our March Outlook, GDP growth forecasts have again seen mixed developments, slightly less poor for the UK and Norway, but up clearly in Sweden but where recessions are still on the cards in all but Switzerland. But it is the upgraded inflation projections that explain t

In-Depth Research: Quick Roadmap Central Bank Forecast/Rationale - February 2023

February 22, 2023 10:44 AM UTC

M/T Quick Roadmap – Fundamental MMKT/CB Roadmap and Rationale
February 2023
US FEDERAL RESERVE
The February 1 December FOMC meeting saw the pace of tightening slowed to 25bps. Inflation has slowed, but January's CPI details still show broad based inflationary pressures at a pace well above the Fed's