Norges Bank maintains its Key Policy Rate at 4.50%, as expected; " It will likely be necessary to keep the policy rate elevated for a time, and we are prepared to raise the policy rate if needed"

Governor Bache

“Inflation is too high. It will likely be necessary to keep the policy rate elevated for a time, and we are prepared to raise the policy rate if needed to bring inflation down to target within a reasonable time horizon”.

Monetary Policy

The Committee judges that a restrictive monetary policy is still needed to bring inflation down to target within a reasonable time horizon.
The Committee has not received information indicating that the outlook for the Norwegian economy has changed materially since its monetary policy meeting in September.
The Committee’s current assessment of the outlook implies that it will likely be necessary to keep the policy rate elevated for a time.
The Committee is prepared to raise the policy rate if warranted by the inflation outlook.

Inflation

Inflation has been above target for several years.
The conflicts in the Middle East are still creating substantial uncertainty about the inflation outlook.
In Norway, inflation has evolved broadly as projected.

Economy

Capacity utilisation in the Norwegian economy has declined and appears to be slightly below a normal level.
Both LFS data and registered unemployment statistics indicate little change in unemployment in recent months

NOK

The krone has appreciated and is stronger than assumed.

What our morning note said

EU Market Open, 5 Nov, 06:44 UTC · what it led with

US President Trump said it was "largely true" that Republicans lost the midterms because of the Iran war, while he said he is not replacing War Secretary Hegseth.

DXY remained subdued post-Midterms alongside lower yields; USTs and Bunds extend gains as lower oil eases inflation concerns.

Headlines that moved markets

Headlines from our feed, and what the market did next.

"We are interested in the diplomatic track, but without making concessions", Al Arabiya citing an Iranian diplomatic source.

WTI crude+0.8%

"Washington has approved the draft memorandum of understanding that the Qatari delegation presented to Iran yesterday", Al-Araby Al-Jadeed reports citing sources close to the mediation team.

WTI crude−3.6%

Qatari mediators expect feedback from the US and Iran within 36 hours on a new proposal to advance talks, according to an official briefed on the talks cited by Reuters.

WTI crude−1.6%

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Norges Bank maintains its Key Policy Rate at 4.50%, as expected; " It will likely be necessary to keep the policy rate elevated for a time, and we are prepared to raise the policy rate if needed"

Governor Bache

Monetary Policy

Inflation

Economy

NOK

Sources

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