Norway IP and CPI, Poor regional growth survey raises risks for earlier cut

Notwithstanding last week's ECB meeting, the oil sell-off and grim future growth outlook highlighted in the Norges Bank's regional network survey weakened the NOK and increased the risk for an earlier Norges Bank rate cut.

The oil service sector reported a considerable fall in output, the pace of which has accelerated since August and has been somewhat larger than expected. The survey suggested that future output is expected to continue its sharp fall ahead. A move by the Norges in December seems underpriced in the context of last week's ECB easing, and upside risks are expected to EURNOK heading into the meeting.

This week, CPI-ATE (Thursday) is expected to have been flat on the month, growing 3% y/y, in line with consensus expectations. Moreover, a disappointing print in Monday's IP data could provide the impetus for an earlier Norges rate cut.