In Norway, market projections are for a further fall in manufacturing PMI data (scheduled on Tuesday), to 48.0, from 49.2 in January.

As the Q4 GDP printed in line with Norges Bank forecasts we continue to look ahead for a 25bp rate cut in March.

Moreover, the Norges FX purchases for March (Monday, previous: NOK 900m/d) will also likely gain attention, given the recent declines in oil prices adding pressure on the fiscal side.

Given the recent oil price rebound, however, we do not expect a change in FX purchases. With the market still pricing less than a 50% chance of a 25bp cut in March, we see scope for a squeeze higher in EURNOK given our base case of a March cut.

Hence, only a material recovery in oil prices from here onwards is likely to stop those cutting rates to new historic lows.

While this upside risk overhangs, we maintain a negative stance on the NOK as EUR/NOK expected to retest the recent highs around 9.60 by Q1 end.

The long futures position is also used as we wish to mitigate (buy) the underlying outrights of spot FX in EURNOK that he will require sometime in the future.

Should the underlying asset price EURNOK (crude oil) price rise, the gain in the value of the long futures position will be able to offset the increase in purchasing costs.