Norges Bank does not provide any indication of earlier cuts - Commerzbank

As expected, Norges Bank left the policy rate at 4.50% yesterday. Anyway, the question was more whether it might give first indications of earlier interest rate cuts. According to the September rate path, it does not expect the first interest rate cut until March 2025. However, the disinflation process has made good progress since the summer, so it is quite possible that it will bring forward the timing of the interest rate turnaround, Commerzbank's FX analyst Antje Praefcke notes.

NOK gains ground in the wake of the interest rate decision

"However, nothing of the sort was apparent in the rather brief statement. "The policy rate will most likely be kept at 4.5 percent to the end of 2024," said Governor Ida Wolden Bache. As we expected, Norges Bank is postponing the decision on when the first interest rate move will come until December, when the new forecasts will be presented in the new monetary policy report, stating: 'The Committee will have received more information about developments ahead of its next monetary policy meeting in December, when new forecasts will be presented'."

"In this respect, it can be assumed that if the data and developments warrant it, Norges Bank will announce an interest rate cut in December for January. Inflation has fallen somewhat faster than expected in September, but the krone is somewhat weaker and international policy rate expectations have risen according to Norges Bank. Norges Bank will therefore keep a close eye on these aspects - in addition to the fundamentals - between now and December."

"The NOK was able to gain ground in the wake of the interest rate decision. While it is still not certain whether an interest rate cut will come sooner than in March, the next move will be down. The prospect of a rising real interest rate, along with the waning uncertainty surrounding the US election, should have helped the NOK."