Norway 360 Weekly Market Review

SEB argues that domestic inflation and labor market tightness in Norway justify a rate hike to 4.50% regardless of external geopolitical shifts. While a reopening of the Strait of Hormuz would lower oil prices, widening interest rate differentials should support the NOK against the SEK and EUR.

Key Takeaways

• 1.Norges Bank is likely to hike the policy rate to 4.50% based on domestic conditions, even if the Strait of Hormuz reopens and oil prices fall.
• 2.The NOK is expected to remain supported by widening rate differentials versus the EUR and SEK, providing a cushion against potential oil price corrections.
• 3.Fiscal spending in Norway is more sensitive to global equity markets than oil prices due to the structure of the Government Pension Fund Global (GPFG).

Table of Contents

• Current Macro & Market Views
• Rates & FX
• Upcoming data
• Norges Bank – Market pricing and SEB view
• SEB Macro view summary
• Standardized material – FX & Fixed Income Markets

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