Trade: NOK 3y2y/5y5y Steepener
Rolls to: 44bp (+13bp)
Understandable to see NOK curve flattening in light of revision of inflation target to 2.0%, and hawkish signal from Norges to initiate hiking cycle with a hike by September; pricing however suggests room for more surprise is limited, as NIBOR rates are already above Norges' Forecast as of February.
In addition, NOK already significantly paid in belly vs EUR and SEK for comparison in past 6mths (SEK already steep so maybe comparison vs EUR more noteworthy). NOK 3y2y/5y5y at the flattest side of its 5yrs trading range. Could fade back to 45bp area as price action settles. 3y2y/5y5y reasonably flat vs spot 2s10s, suggesting belly may be extended.
Trade and what it rolls to: