Norwegian and Swiss CPI data the focus

In Norway, August Industrial Production (Wednesday) and inflation data (Friday) will be the main focus of the week. Underlying inflation (CPI-ATE) is expected to have grown by 2.9% y/y (consensus: 3.0% y/y). The Bank's updated forecasts imply material further downside in Norwegian growth and a tolerance of a weaker NOK and higher short-term inflation. With this in mind, growth indicators will remain increasingly important. 

"We see scope for further correction lower in EURNOK on the basis of NOK undervaluation but continue to think that our near-term EURNOK forecasts are skewed to the upside. Momentum-wise, our indicators continue to point to an overbought EURNOK position", says Barclays.

Finally, data from Switzerland are likely to weigh on the CHF as unemployment is expected to tick higher to 3.4% from 3.3% whereas inflation is likely to dive into further negative territory, dropping 1.5% y/y. Modest EURCHF appreciation is expected and the likely path of SNB policy will be predicated on further ECB easing. As a result, the forthcoming 22 October ECB meeting could likely be a key driver for the near-term evolution of the CHF.