SNB starts its loosening cycle, Norges Bank on hold

The SNB under Chairman Thomas Jordan has never shied away from making big calls, so it was fitting that it surprised markets with a 25bp rate cut today, to 1.5%, only three weeks after Mr Jordan announced he would leave his post in September. We expect two more rate cuts this year, leaving the policy rate at 1.0%. In contrast, Norges Bank left its policy rate on hold today and appeared in no rush to start cutting rates, but we still think it will ease policy sooner than it is signalling.