More rate cuts from Norges Bank in the pipeline

Norges Bank kept rates on hold at 1,25% at the March meeting, but signalled that rates will be cut by 25bp before the summer given no big surprises. 

Nordea Research notes .....

• Currently we think Norges Bank will leave rates on hold in May, but cut rates in June. Following the June rate cut we think Norges Bank will be forced to cut again in the second half of 2015. If Norges Bank cut rates in June and signals that it was the last rate cut NOK could strengthen significantly. 
  
  
• The same could happen after the Sept meeting if Norges Bank in June gives a fair chance of a cut in Sept, but fails to deliver, especially with QE in the euro zone and zero- rates among our trading partners. Then Norges Bank could be forced to cut rates in Nov.
  
  
• Our forecast is for another cut in Nov, but the timing is uncertain. If Norges Bank fails to deliver two cuts in 2015 we think the argument for another cut in 2016 is strong.