NOK under pressure ahead of oil investment survey – Danske Bank

By FXStreet Senior Analyst at Danske Bank Sverre Holbek noted the relevance of today’s release of the oil investment survey.

Key Quotes

“In FX markets, today’s oil investment survey out of Norway will naturally attract a lot of attention given its status as a key indicator for future private sector growth and thereby the economy’s need for a weak currency”.

“Since the last survey in February, the oil price has risen by USD14-15/bl, reducing the likelihood of a further downward revision of investment estimates for this year”.

“Having said this, we do not expect any marked improvements in the 2016 estimates either (still at -14% y/y), which comes down to (1) oil price changes influencing investments decisions with a lag and (2) the Norwegian oil project portfolio being characterised by a few large projects (creating a non-linear relation to oil price changes)”.

“The most interesting part of the release will be the first ‘2017′- estimates where we look for a decline of 5-6% y/y. If proved right this would be marginally better than Norges Bank’s projection of -7% from March but not enough, in our view, to trigger a strong NOK-rally”.
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Source:: FX Street