Another set of soft inflation numbers is set to be released from Europe in the coming weeks. We see both GBP and NOK inflation surprisingly low for November, while Swedish evidence is a tad more mixed.
We flip our exposures in the Energy space and find value in adding a lagged proxy trade to the current oil price spike.
On the back of the first truly soft inflation report from the US, we take a look at the inflation regimes across all major countries and find Norway and the UK to be the odd ones out. Paying GBP and NOK rates may still make a lot of sense.
Norges Bank is still asked to sell plenty of NOKs a month by the Treasury Department, while the scope for tax income is falling apart by the week. Position accordingly through June.
Norges Bank is once again caught behind the curve in its FX management policy due to the landslide in Natural Gas prices. Unless Norges Bank immediately stops selling as many NOKs per day, the NOK selling pressure is likely going to continue.