Majors & Scandies
Well perhaps not… However, our focus will definitely be on Norway today as the central bank is announcing the future deposit rates and as the Governor of the central bank, Svein Gjedrem, speaks about monetary policy rates. Broadly consistent with market expectations, our house view calls for unchanged rates in Norway at today's announcement. The next monetary policy report is due June 25 and Norges Bank may be reluctant to change policy until the report is released. Inflation is on the rise, inflation expectations are high, and the labour market is tight - all conditions that speaks on behalf of a hike at today's announcement.
However, the housing market has weakened, the growth in Norway and globally has decreased, and the high money market rates are doing a bit of the job for Norges Bank in keeping inflation at an acceptable level. Overall, this leads our economists to expect an unchanged rate today. However, the central bank could very well be a bit hawkish in their press release due to the inflation issues. We do, however, prefer not to have any position over today's rate announcement.
CPIs from the German 'Bundesländer' (federal states) are due during the day and the harmonized index is also due 'at some point'. Yesterday US New Home Sales was a bit better than expected (526k vs. 520k), but last months figure was revised downward (526k vs. 509k). In addition, US Consumer Confidence fell in May. Overall, money market rates increased slightly in both the Eurozone, the US, and in the UK.