Norway CPI likely to decline

In Norway, the recent NOK weakness versus the EUR further unwound last week, despite increased oil market volatility. 

"For the week ahead,CPI-ATE is expected to increase 2.7% y/y, while CPI inflation is expected to decline 0.3% m/m (1.8% y/y)", says Barclays. 

Moreover, market expectations are for a 0.5% m/m decline in Manufacturing Production, while increased market emphasis will also be placed on the Norges Bank Regional Network Report, providing insights into the state of the Norwegian economy and its sensitivity to the recent pronounced decline in energy prices. 

The poor economic outlook of the past few months has materially increased the chance of an additional rate cut by the Norges Bank in its September meeting, although it is skeptical, given increased financial stability considerations and the fact that much of the easing has in fact occurred through a weaker NOK. 

"EUR/NOK is still expected to trade around 9.25 in Q3", added Barclays.