The coming week offers figures on employment and wage growth in the USA, on European price growth, and Norwegian house prices.
Senior economist at Handelsbanken, Sara Midtgård, summarizes this week’s most important key figures Photo: Adrian NielsenPublished: Published:
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In the international news picture, the latest inflation figures come from the eurozone and from the US there are figures for employment and wage growth.
Here at home, Eiendom Norge offers fresh figures for Norwegian house prices for June on Thursday. But as early as Monday, Norges Bank will present figures for foreign exchange transactions for August, which may affect the krone exchange rate.
These are the big highlights of the coming week, believes Sara Midtgaard, senior economist at Handelsbanken
– It will be exciting to look at the labor market report from the USA. It can either influence the Fed to further increase interest rates, or indicate that the interest rate peak has been reached. The Eurozone’s inflation figures will also be decisive for whether the ECB chooses to raise interest rates again in September.
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This happens in week 31
Monday 31 July
Norges Bank publishes figures for foreign exchange transactions for August. Inflation figures for the eurozone. Estimated GDP figures for the eurozone. German GDP figures. Italian GDP figures.
Tuesday 1 August
Toyota presents quarterly figures. Unemployment figures for the eurozone.OBOS with house prices for July. The JOLTS report with the number of new vacancies, the number of new hires, the number who have quit and the number who have been laid off in the US.
Wednesday 2 August
The US Department of Energy presents weekly oil storage figures. SSB presents figures for weekly salmon exports.
Thursday 3 August
Amazon presents quarterly figures.Apple presents quarterly figures.Lufthansa presents quarterly figures.Money supply (K2) presented in NorwayNorwegian house prices for June.Bank of England announces interest rates.
Friday 4 August
“The most important figure of the month” – employment report for the USA. Interest rates in banks and credit institutions in Norway. Show more
Norwegian house prices
On Tuesday, OBOS will publish the housing prices for the homes that are associated with the housing construction team. But the most important figure will not come until Thursday, with the national housing price report from Eiendom Norge.
– We believe that house prices will still fall by 0.7 per cent seasonally adjusted, says Midtgård.
House prices tend to fall by around one per cent in July, so Handelsbanken expects the decline from June to July to be greater than is normal.
– It is especially the interest rate increases from Norges Bank that are now starting to “kick” more into house prices. The double interest rate hikes we had in June have still not been priced in, so there is still a long way to go.
According to Midtgaard, the expected fall in housing prices comes from, among other things, a surplus of housing on the market in relation to demand.
– This is a natural response to the interest rate hikes from Norges Bank.
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American employment
On Friday at 2:30 p.m., the labor market report showing the employment figures for the United States comes out together with figures for wage growth. This is also called “the most important number of the month”.
This will affect whether the Fed will determine that interest rate hikes have reached their peak, or whether further interest rate hikes are needed.
– After a long period where the labor market in the US has been very high, you have seen tendencies towards a cooling in the US labor market, says Midtgaard.
It seems that a better balance is being achieved in the labor market, and growth is expected to slow from 209,000 in June to 200,000 in July.
– There is a near 40 percent probability of another hike from the Fed. The labor market report can easily tilt to one side or the other, says the senior economist.
If the report shows that the labor market is stronger than expected, Midtgaard assumes that this will tip the probability of a new rate hike to over 50 per cent.
Fed chief Jerome Powell is closely watching the labor market report due on Friday. Photo: Susan Walsh/AP
Inflation news
On Monday, the inflation figures come from the euro zone, the euro zone, the countries that use the euro. It is important because it controls which interest rate path the ECB sets going forward.
– We see that core inflation, which is what the ECB is most concerned about, is expected to remain at fairly high levels.
The estimates are at 5.4 per cent in July. Last month, the price increase was 5.5 per cent.
– We probably believe that these inflation figures will still show that core inflation in the eurozone is still at too high a level, says Midtgaard.
Due to too high expected inflation, Handelsbanken assumes a further interest rate increase, despite the fact that the ECB’s central bank governor, Christine Lagarde, recently stated that the interest rate peak may already have been reached for the eurozone.
– The market sees a well-considered likelihood that there will be another rise in September.
Today, the key interest rate in the euro area is 3.75 per cent, but Handelsbanken believes the interest rate will be raised to 4 per cent during the autumn.
The ECB’s central bank governor, Christine Lagarde, has said that the interest rate peak may have already been reached. Photo: JOHANNA GERON / Reuters
Norges Bank takes into account how other central banks set their interest rates when determining their own interest rates.
Midtgaard explains that when banks such as the ECB and the Fed see themselves finished with interest rate increases, this can dampen expectations of future interest rate increases in Norway.
– International expectations about the policy rate are therefore an important piece of the puzzle for how much Norges Bank ends up raising.
The key interest rate in Norway is currently 3.75 per cent, but it is expected to reach a peak of 4.25 per cent, which is 0.25 per cent higher than in the eurozone.
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2023-07-30 18:32:24
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