The highlight of this morning's session was the release of the BoE minutes from their last MPC meeting, and most market participants were braced for the possibility that more members may have decided to vote in favour of increasing the asset purchase target. In actuality, there was no such revelation in the voting; 9-0 was the vote in favour of keeping rates at 0.50% (as expected), while the asset purchase vote was once again an 8-1 affair, with Posen the only dissenter calling for an increase of GBP50bn. In spite of the lack of change in voting patterns, there was a considerable change in the committee's consensus opinion, with the tone of the minutes extremely dovish. The statement admitted that the decision on more quantitative easing was finely balanced, and said that most of the MPC see QE expansion as increasingly probable. What is more, the committee considered revisiting the decision not to cut rates - a possibility which few had given much likelihood to before today. Of course, the problem for the central bank is that they have already let CPI surge to 4.5% YoY in August, more than double their mandated target of 2.0%. The consequences of either cutting rates or increasing asset purchases would include upward inflationary pressure, something that seems utterly mad to consider in the light of current inflation readings. Of course, the minutes tried to feebly address this concern by asserting that the risks to growth in the current climate pose even greater downside risks to inflation; but the market has heard all this before and BoE credibility is wearing thin. It has been nearly 2 years now since year on year CPI readings in the UK surged above 2.0%, and rather than pulling back sharply as the BoE have constantly predicted, inflation has instead risen steadily above 3%, and spent the last 8 months above 4%.   Coming up later today, the Norges Bank will be making its latest interest rate decision; but analysts are unanimously expecting that interest rates will be kept on hold at 2.25%. Last month, the Norges bank surprised the market by keeping Norwegian interest rates unchanged at 2.25% (consensus was looking for a hike of 25bp); however rather than improving, the global outlook has deteriorated since then so we doubt the committee will be inclined to hike now. Since the last meeting, Norwegian data has been mixed; mainland GDP was slightly stronger than expected at 1.0% QoQ, and this morning the AKU unemployment rate dropped unexpectedly again to 3.2% from 3.3%. On the flip side, both retail sales and industrial production in July were poor and CPI dipped sharply in August to 1.3% YoY. With troubles in Europe no closer to a solution, and the NOK's recent appreciation already administering some level of tightening, it is highly likely the Norges Bank will therefore choose to err on the side of prudence and defer any more rate hikes until the economic outlook is less uncertain. Given the Norwegian currency's appeal as both a safe-haven and relatively high yield option for carry trades, it is unlikely the NOK will suffer too much on the back of an unchanged rate decision. If anything, the biggest risk for NOK bulls is if the central bank decides that currency appreciation is getting to levels that pose a threat of deflation (similar to the situation in Switzerland), and decide to intervene. Central bank governor Olsen has been vocal of late in highlighting the risks to growth and inflation should the krone be too strong; but for now, we feel that intervention is not going to materialize in the near term.  
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