EURNOK to reach 9.10 by Q2 2016

Norges Bank is unlikely to react to additional stimulus ECB. However, as the economic outlook seems to vulnerable to the stimulus, there is a possibility of 25bp rate cut in the next three to six months, says Barclays.

Lower oil price hits the employment growth in the resource sector, and the labor market is quite quite immobile. Therefore, unemployment rate increased sharply.

"Looking ahead, we expect higher oil prices, which, in combination with heavy market pricing for additional Norges easing, makes us cautious in calling for material depreciation on the basis of an already undervalued NOK. On balance, we see EURNOK at 9.10 by Q2 2016 and 9.0 in Q4 2016", estimates Barclays.