Norges Bank's rate cut likely in September

Norway's unemployment figures is likely to confirm a weakening trend in labour market. Consensus expects the unemployment rate of the economy at  4.3% in July, notes Danske Bank. NOK's sensitivity to oil price changes is very high and data on US oil inventories could be directional for EUR/NOK this afternoon as it was last week. 

"The Norges Bank is expected to cut rates by 25bp in September as a final insurance cut against the collapse in oil prices. The market is pricing in 20bp for September and around 45bp before June 2016 in terms of rate cuts. However, the market may up its expectations ahead of the September meeting pricing in a full 25bp rate cut for the meeting and 50bp in total over the coming 12 months", states Danske Bank.

This coupled with the collapse in the oil price may put further pressure on the NOK short term, both against the EUR and USD.