* Majors pared gains, Asian markets mixed
* Korea’s current account surplus hit record in July
* Norges bank likely on hold, Brazil central bank likely to deliver rate cuts
What to watch for today
NOK: On hold. We expect the Norges Bank to keep rates on hold with an unchanged policy outlook. Data flow since the June meeting has been relatively mixed. Even though the Q2 GDP growth came in stronger relative to the Norges Bank’s estimate, the PMI suggests a gloomier economic outlook. At the same time, inflationary pressures remain relatively subdued. However, credit growth remains robust, with credit to non-financial enterprises rising 6.8% yoy in June and credit to households growing at 7.1% yoy. On a seasonally adjusted basis, house prices rose 0.8% mom in July (7.8% yoy). This argues for policy rates to be on hold, especially with the trade-weighted NOK about 2% weaker relative to the Fed 2012 highs. The Norges Bank should also get some degree of comfort from the reduced tail risks in the euro area and the tentative signs of stabilization in the euro area PMIs.
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