At Any Rate Global Rates: European rates Scandi and UK central bank round up
Jun 20, 2025
This discussion digs into the recent rate decisions by Norges Bank, Riksbank, and the Bank of England. An unexpected cut by Norges Bank shakes up market expectations. The team reflects on Scandinavian economic indicators and inflation's impact on rate forecasts. Plus, they unpack the Bank of England's dovish outlook, fueled by concerns over GDP and the labor market. The podcast considers how slowing U.S. growth could influence front-end yields amid ongoing inflation and wage trends.
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Norges Bank Rate Cut Surprise
- Norges Bank surprised markets by cutting rates unexpectedly amid expectations for stability.
- They signal two more cuts this year, but show caution about moving below neutral without core inflation drop or recession.
Market Reaction to Norges Cut
- Market reacts sharply to Norges Bank cut with front-end yields rallying and curve steepening.
- Near-term curve steepening limited, as rates price in earlier, not deeper, cuts with uncertainty persistent.
Riksbank Easing Outlook
- Riksbank's June 25 bps cut was widely expected with downside inflation surprises.
- Market prices one more cut by year-end, but JPM sees higher chance for earlier, September cut amid softer inflation and growth risks.