Let’s not forget USDJPY amidst EUR spike. NOK jumps.

NOK rallies on hot Norway CPI data
NOK jumped this morning on Norway reporting a hot CPI print, with the underlying CPI coming in at a spicy 1.0% MoM and 3.4% YoY level versus the 0.5%/2.9% level expected, the first big rise in the YoY figure since it started falling in 2023. This has the market wobbling on the Norges Bank’s supposed coming March 27 rate cut plans for good reason.

Before today’s jump, the NOK has been weak of late on the drop in oil and even EU natural gas prices, but perhaps as well on NOKSEK flows related to that development and the recent huge breakout in the Swedish krone. On the one hand, NOK faces further downside risk a) if the Trump administration is able to achieve even lower prices in crude oil (this looks very difficult from these levels without a massive global recession) or b) in the event of a détente in Ukraine if this is seen as unlocking long term Russian natural gas flows back into Europe. On the other hand, the Norwegian mainland economy will have much to gain from new fiscal expansion in Europe, especially in its aluminum and defense industries. Today’s NOK rally establishes an important line in the sand in EURNOK around the 11.80 area, although the technical situation to the downside doesn’t get more interesting until about 11.52. USDNOK is another way to express NOK strength if looking in the crosses.

The week ahead

Tariffs tariffs tariffs. Tariffs are always in focus, but specifically this week we have the steel and aluminum tariffs meant to go into effect on Wednesday. We’ll also look for whether Trump and Canada’s coming new PM Mark Carney (of BoC/BoE fame or some would say infamy) can cool the temperature. Political hay is being made in Canada from outrage at Trump’s antics on Canada becoming the 51^st state as much as the tariff moves themselves and Canada has refused to budge on its retaliatory tariffs despite the US dropping tariffs on USMCA-listed goods. China has moved against Canada with tariffs on pork, canola (rapeseed) and other food products effective March 20. In general, however, the tariff headlines have diminishing, if still some, impact.

US JOLTS job openings survey (Tuesday) – it shouldn’t be a big event, because the data quality in this survey is terrible, but a large surprise can make an impact.

US CPI on Wednesday. This is the key data point of the week for the US, but even an uncomfortably high level might be largely looked through if broad risk sentiment continues to deteriorate.

Bank of Canada meeting on Wednesday – can’t see how Bank of Canada delivers a meaningful surprise – growth risks abound from the tariff tiff for now – so we likely see the expected rate cut (99% priced) plus a cautious outlook with considerable downside risks economically and uncertainty on the inflation front.

Sweden CPI (Thursday) – an important near term test after a massive SEK rally.

US government funding deadline (Friday). To avoid US government shutdown risks, a House bill that would fund the government through September 30 must pass this week and then pass the Senate without the Democrats filibustering it (a procedure to stop actions). US growth will suffer on a shutdown – would the Democrats risk a shutdown to protest the proposed cuts to social spending that is in the bill?

NEW FX Board of G10 and CNH trend evolution and strength.
Note: If unfamiliar with the FX board, please see a video tutorial for understanding and using the FX Board.

The positive euro reading looks surprisingly modest, perhaps, given the scale of last week’s move, but remember that it is an average reading across all G10 + CNH pairings and the SEK has been in what I called “gangster mode” of late, while NOK popped sharply today – see individual pair readings below to see the full picture.

Table: NEW FX Board Trend Scoreboard for individual pairs.
Interesting to see EURJPY trying to flip to positive if it stays at present levels or higher into the close (that is the dark shading), but both EUR and JPY are quite strong. In general, some very strong readings across the FX pairs, with CNH hewing to the direction of the US dollar in the CNH crosses as its volatility stays muted/controlled.