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12 Mar 2013
Forex Flash: Building a NOK framework - Nomura
Nomura strategists Geoffrey Kendrick and Matthew Slade note that a well developed framework for analysis is always useful as an FX strategist.
With G10, they feel that this is most true for NOK, given the complex nature of the inflows associated with the government pension fund. Overall, they feel that there is a bias to sell EUR/NOK as the 2012 sale of an extra NOK 9bln from the petro buffer is unlikely to be repeated in 2013. Furthermore, they note that the basic balance suggests that EUR/NOK “should” be lowered. They finish by writing, “We see Thursday’s Norges Bank meeting as likely to maintain the first rate hike forecast for December, providing a catalyst for EUR/NOK to move lower, catching up to EUR/SEK.”
With G10, they feel that this is most true for NOK, given the complex nature of the inflows associated with the government pension fund. Overall, they feel that there is a bias to sell EUR/NOK as the 2012 sale of an extra NOK 9bln from the petro buffer is unlikely to be repeated in 2013. Furthermore, they note that the basic balance suggests that EUR/NOK “should” be lowered. They finish by writing, “We see Thursday’s Norges Bank meeting as likely to maintain the first rate hike forecast for December, providing a catalyst for EUR/NOK to move lower, catching up to EUR/SEK.”