Following the FOMC meeting last night, this week's long list of central bank meetings continues with three meetings on the agenda today.
We expect Norges Bank to cut its key rate by 25bp to 0.50% at the rate-setting meeting. We expect the rate path to be revised down, to a policy rate of 0.30% from Q4 16, indicating a c.80% probability of another rate cut before Q4 16. For more details, see Scandi Markets page 2 and Norges Bank Preview: A 25bp cut and a dovish bias, limited EUR/NOK upside , 14 March.
We expect the Bank of England (BoE) to maintain the Bank Rate and the stock of purchased assets at 0.50% and GBP375bn, respectively. At the last meeting, the BoE made it clear that it is definitely not 'Fed light' as there are many reasons for it to stay on hold for a long time - subdued wage growth, the ECB's easing bias and Brexit uncertainties, to name a few.
We expect the Swiss National Bank (SNB) to stay put as well. As the ECB effectively has ruled out more rate cuts, the pressure on SNB to deliver lower rates is limited. We think that the SNB will handle any unwanted CHF strength via intervention. We look for some limited downside near term in EUR/CHF but still expect it to move gradually higher towards 1.15 in 3-12M.
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