NOK: Inflation surprise challenges rate cut pricing – BBH
Source Fxstreet
Brown Brothers Harriman’s Elias Haddad highlights that the Norwegian Krone is underperforming as lower crude Oil prices weigh, even as Norway’s February inflation remains above Norges Bank projections. With the central bank having penciled in one 25 bps cut by Q4, BBH warns markets may need to reprice rate cut expectations given rising spare capacity and the projected negative output gap in 2026.
Norway data complicates policy outlook
"NOK is underperforming on lower crude oil prices. Norway inflation slowed in February but remains high relative to the Norges Bank’s forecast. Headline CPI fell to 2.7% y/y (consensus: 2.8%, Norges Bank: 1.9%) vs. 3.6% in January and underlying CPI dropped to a four-month low at 3.0% y/y (consensus: 3.0%, Norges Bank: 2.6%) vs. 3.4% in January."
"In January, the Norges Bank penciled in one full 25bps rate cut to 3.75% by Q4, while the swaps curve price-in small odds of a rate hike in the next twelve months."
"The risk is the market reprice rate cut bets because of rising spare capacity in Norway’s economy. The Norges Bank projects the country’s output gap to average -0.2% of potential GDP over 2026 vs. 0% in 2025."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
Disclaimer: For information purposes only. Past performance is not indicative of future results.
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Bitcoin experienced a sharp decline this weekend, briefly erasing its 2025 gains and dipping below its year-opening value of $93,507. The cryptocurrency fell to a low of $93,029 on Sunday, representing a 25% drop from its all-time high in October. Although it has rebounded slightly to around $94,209, the pressures on the market remain significant.
The downturn occurred despite the reopening of the U.S. government on Thursday, which many had hoped would provide essential support for crypto markets. This year initially appeared promising for cryptocurrencies, particularly after the inauguration of President Donald Trump, who has established the most pro-crypto administration thus far. However, ongoing political tensions—including Trump's tariff strategies and the recent government shutdown, lasting a historic 43 days—have contributed to several rapid price pullbacks for Bitcoin throughout the year.
Market dynamics are also being influenced by Bitcoin whales—investors holding large amounts of Bitcoin—who have been offloading portions of their assets, consequently stalling price rallies even as positive regulatory developments emerge. Despite these sell-offs, analysts from Glassnode argue that this behavior aligns with typical patterns seen among long-term investors during the concluding stages of bull markets, suggesting it is not indicative of a mass exodus.
Notably, Bitcoin is not alone in its struggles, as Ethereum and Solana have also recorded declines of 7.95% and 28.3%, respectively, since the start of the year, while numerous altcoins have faced even steeper losses.
Looking ahead, questions linger regarding the viability of the four-year cycle thesis, particularly given the increasing institutional support and regulatory frameworks now in place in the crypto landscape. Matt Hougan, chief investment officer at Bitwise, remains optimistic, suggesting a potential Bitcoin resurgence in 2026 driven by the “debasement trade” thesis and a broader trend toward increased adoption of stablecoins, tokenization, and decentralized finance. Hougan emphasized the soundness of the underlying fundamentals, pointing to a positive outlook for the sector in the longer term.
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