In addition to inflation data from Europe and the US, this week offers several Norwegian key figures that will be important in the question of whether the interest rate peak has been reached.
BITES: Chief economist Kjetil Martinsen at Swedbank believes that weaker debt growth is a clear sign that interest rates are already taking a significant toll on Norwegian households. Photo: Cicilie S. Andersen / E24Published: Published:
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Chief economist Kjetil Martinsen at Swedbank believes that the week will primarily be characterized by digesting the recent interest rate meetings.
– The central banks are very clear that interest rates will be high for a longer period of time. I think that will affect both the share and interest rate markets in the coming weeks, he says to E24.
In this connection, he singles out European inflation as one of the most important market events.
Price growth in the eurozone eurozone countries that use the euro is expected to slow to 4.5 per cent in September from 5.2 per cent the previous month. If you ignore food and energy prices, the economists’ expectation is a half percentage point decrease to 4.8 per cent, according to Bloomberg.
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If it turns out that inflation is actually subdued, it will strengthen the belief that the interest rate peak in the eurozone may have been reached. The interest rate trend in Europe also affects Norway’s interest rate level and krone exchange rate, because the countries are important trading partners.
Recently, the European Central Bank (ECB) raised the interest rate to 4.0 percent, which is the highest in the Union’s history. At the same time, it was suggested that the interest rate peak has been reached. The eurozone, like Norway, has an inflation target of two percent.
Last week, Norges Bank raised the interest rate to 4.25 per cent, but opened the door for a new increase in December, which will probably be the last. However, it depends on the development of the economy.
Farevarsel
This week we learn more about the Norwegian economy, with new figures for debt growth, retail trade and unemployment.
On Monday, Statistics Norway publishes debt statistics for August. Martinsen points out that borrowing by Norwegian households is on the decline. In July, growth was 3.7 per cent compared to the same time last year.
– It is linked to the activity in the housing market and shows that interest rates bite a good deal. It is also a sign that the activity further ahead may become significantly weaker, he says.
In Sweden, debt growth has fallen sharply to close to zero, and this could be a warning sign for Norway, he adds. We will get fresh Swedish figures on Wednesday.
Calendar:
Monday 25 September:
SSB: Debt growth (K2)Norges Bank: Deputy central bank governors speak for Norges Bank’s regional network in Central NorwayFinanstilsynet: Report on losses in banksSAS: Deadline for collecting money from investorsGermany: Business index IFO The ECB chief speaks in the EU parliamentUSA: Chicago Fed index, Dallas Fed industrial index
Tuesday 26 September:
Oslo Business ForumUSA: Housing prices (S&P/Case-Shiller), Richmond Fed’s industrial index, new home sales, Dallas Fed’s services index, weekly oil inventory figures (API)
Wednesday 27 September:
Statistics Norway: The unemployment survey (AKU), weekly export figures for salmonNVE: Weekly figures for water storage Cambi holds an investor dayOslo Business Forum continuesResults from H&M Germany: Consumer confidence (GfK)Sweden: Trade balance, loan growth, consumer confidence and inflation expectations USA: Order for durable goods, oil inventory figures from EIA
Thursday 28 September:
Statistics Norway: Interest rate statistics, commodity trading and consumptionResults from Questback Group, Tine, Exact TherapeuticsIcelandic Salmon (partly owned by Salmar) holds investor day The government receives a report (NOU) from the Fisheries Committee on measures to promote sustainable growth in fish farming Germany: Inflation Spain: Inflation USA: Weekly unemployment figures, GDP growth (final figures), agreed home sales
Friday 29 September:
NAV: ArbeidsledighetSSB: Production index for construction and constructionNorges Bank: Krone sales for OctoberResults from Alternus Energy, Nortel, Recreate, Black Sea PropertyJapan: InflationGermany: Retail trade figures, unemploymentSweden: Retail trade figuresGreat Britain: GDP (final figures), house pricesFrance: InflationItaly: InflationEurozone: InflationUSA: Inflation ( PCE prices) and wage growth, Chicago-PMIKChina: Mainland stock exchanges closed (National Day celebration)
Saturday 30 September:
Sea view
On Thursday, Norwegian retail trade is expected to show a decline of 0.3 per cent in August, after a fall of 0.8 per cent the previous month, according to Bloomberg. The figures can fluctuate quite a bit from month to month and the economists’ estimates vary from a fall of 0.5 per cent to an increase of 0.5 per cent.
The trade in goods is very important to the Norwegian economy, and is the industry with the most employees after the health and care sector.
SEB economist Pia Fromlet points out in a weekly report that the retail trade has held up better than expected, but that it looks weaker going forward.
INFLATION-SPECIFIED WEEK: Inflation figures from the EU are highlighted among the week’s most important market events, but we also learn how the Norwegian economy is doing via debt growth, unemployment and retail trade. The picture is an illustration from Germany. Photo: INA FASSBENDER / AFP
Increasing unemployment
On Friday, we will find out how unemployment is going, when Nav releases the statistics for September. These are figures that Norges Bank follows closely in its interest rate setting.
Economists expect the unemployment rate to remain at 1.9 percent (without adjustments for seasonal variations), according to Bloomberg.
Unemployment normally rises as interest rates rise, but so far the increase has been relatively cautious.
The SEB economist points out that there are large differences with rising unemployment in cyclically sensitive sectors and cyclically sensitive sectors that fluctuate in step with the development of the economy, while it continues to fall in parts of the service sector and in the public sector.
– New registrations of vacancies are trending lower and point to gradually higher unemployment in the future, she writes.
SEB expects the seasonally adjusted unemployment rate to show a slight further increase this month.
The kroneoverraskelse?
On Friday, Norges Bank announces how many kroner will be sold (exchanged) in the market to transfer to the Oil Fund, which invests the money abroad.
After Norges Bank surprisingly increased krone sales by NOK 100 million to NOK 1.1 billion per day in September, neither DNB Markets nor SEB believe there will be any change in October.
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Swedbank’s Martinsen also does not envisage big news ahead of the state budget, which will arrive on 6 October.
– But all other things being equal, rising oil prices at least mean that there will be no smaller krone sales from Norges Bank, he says.
The surprising increase last month caused a significant weakening of the krone. Even if the krone sales are largely offset over time by the oil companies’ krone purchases to pay tax, they can still affect the krone exchange rate due to their size, particularly because the exchanges do not necessarily take place at the same time.
Probably moderated US inflation
The week ends on Friday afternoon with inflation (PCE) from the US for August. Adjusted for food and energy, this is the central bank’s (Fed) favorite measure of price growth. Here, the economists’ expectation is a decline to 3.9 per cent from 4.2 per cent the previous month, according to Bloomberg.
We have already received the Consumer Price Index (CPI) from the US for this month.
Last week, the Fed kept interest rates unchanged in the range of 5.25-5.50 percent, but did not rule out one more hike this year, before moving towards cuts next year.
2023-09-24 19:14:25
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