Price inflation in Norway is expected to fall further. There will still need to be big surprises for Norges Bank to drop another interest rate hike later this year, believes Handelsbanken economist Sara Midtgaard.
Senior economist Sara Midtgaard expects that core inflation will moderate slightly in September, but not more than what Norges Bank itself has estimated. Photo: Adrian Nielsen / E24Published: Published:
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The Norwegian economy characterizes the start of the coming week. It opens on Monday morning with fresh GDP figures on how the economy developed in August.
This is followed by the summary of the price increase in September on Tuesday, as one of the highlights of the week’s economic calendar.
– We think this week’s inflation figures will point in the direction of another rate hike from Norges Bank, says Sara Midtgaard, senior economist at Handelsbanken.
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The high price inflation experienced in Norway is the main reason why the central bank has raised the interest rate by more than four percentage points in just two years. At the end of September, Norges Bank raised the interest rate to 4.25 per cent, and at the same time announced that the interest rate will probably go up to 4.5 per cent in December.
– There must therefore be major downside surprises in the inflation figures for this interest rate hike to come to nothing, says Midtgaard.
This is happening this week
Monday 9 October:
SSB: GDP figures for August The winner of the Nobel Prize in economics is announced (the Swedish Riksbank’s prize in economic science in memory of Alfred Nobel) Quarterly update from Kid Annual meetings of the IMF and the World Bank in Marrakech Industrial production in Germany The bond market in the USA is closed due to Columbus Day. The stock exchanges are open as normal.
Tuesday 10 October:
SSB: Inflation in Norway for September Quarterly update from PGS IMF releases the report World Economic OutlookMeeting in the Control and Constitutional Committee on the competence cases Luxury brand group LVMH releases sales figuresInflation in Denmark for September
Wednesday 11 October:
Interest rate report from the Federal ReserveFinal inflation figures from Germany for SeptemberProducer prices in the USA for September
Thursday 12 October:
Inflation for September from the USA Quarterly update from Vår Energi The electricity price committee presents report GDP for August from Great Britain IEA’s monthly report Opec’s monthly report
Friday 13 October:
Quarterly reports from ABG Sundal Collier and Norwegian Block Exchange Bank results from Citigroup, JP Morgan and Wells Fargo Asset manager Blackrock presents quarterly figures Inflation from Sweden for September Industrial production in the euro zone Inflation figures and trade balance from China Quarterly report from the insurance company Tryg Final inflation figures from France and Spain for September Show more
– People have become more cautious
It is expected that price inflation will have come down another notch in September. Economists believe overall inflation will land at 4 percent compared to the same month last year, according to estimates obtained by Bloomberg. It stood at 4.8 per cent on an annual basis in August.
– Inflation peaked in September last year, at seven and a half per cent, while now we are around four. This is particularly due to the decline in electricity prices, says Kjersti Haugland, chief economist at DNB Markets.
Core inflation, which ignores energy prices and tax changes, is expected to fall more gently to 6.1 per cent compared to the previous year. Norges Bank is most concerned with this when they set the interest rate. The central bank’s goal is stable inflation of around two percent.
Chief economist Kjersti Haugland believes there are signs that interest rates are starting to bite people. Photo: Adrian Nielsen / E24
The economists, including Haugland and Midtgaard, expect the inflation figures to come in roughly in line with what Norges Bank has estimated.
– We are experiencing that the rise in interest rates has started to bite into people’s finances, and I think we will be able to see that in the figures that will arrive on Monday morning. People have become more cautious, concludes Haugland.
Nobel Prize, Fed report and more inflation
Internationally, inflation figures and interest rates also appear to be the biggest events in the calendar.
The week starts with a completely different annual event, when the Nobel Prize in Economics is awarded on Monday. Last year, among others, former US central bank chief Ben Bernanke won the prize for research into banks and financial crises.
In the US, the results for the price increase in September will be released on Thursday afternoon, which is being followed closely by the markets around the world. Economists expect inflation to moderate slightly to 3.6 per cent. Core inflation is also expected to come down a bit to 4.1 per cent, according to estimates compiled by Bloomberg.
The night before, we get a closer insight into what the US central bank is thinking, when the minutes from the previous interest rate meeting are published. At its meeting in September, the Federal Reserve kept interest rates unchanged.
Price growth has steadily calmed down in the US, and the central bank last time kept interest rates unchanged. On Wednesday, we will get more details about the assessments of central bank governor Jerome Powell and the rest of the Fed. Photo: Seth Wenig/AP
Sweden, Denmark and China are other countries that release inflation figures throughout the week, while final inflation figures for several important European economies are coming.
The results season is getting underway
Towards the end of the week, we get our first taste of this round of results season, when the companies both in this country and on Wall Street start releasing quarterly reports for the third quarter.
As usual, ABG Sundal Collier is early among the companies on Oslo Børs. The brokerage will release quarterly results on Friday, the same day that the crypto exchange Norwegian Block Exchange will present its half-yearly report.
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In the US, the banks are usually the first big names to release figures. Citigroup, JP Morgan and Wells Fargo present quarterly reports on Friday. So does Blackrock, the world’s largest asset manager.
Vår Energi, PGS and Kid will also provide updates during the week, ahead of their release of figures later this autumn.
2023-10-08 19:41:25
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