Erik Bruce follows the Norwegian economy closely, concentrating on the foreign exchange and interest rate markets. His role is to formulate and present Nordea's view on the domestic and international economy for domestic and international clients.
Prior to joining Nordea, Erik has worked for the Norwegian Ministry of Finance and the consultancy firm, ECON.
Next week´s key events USA Next week’s most important US data release is the Nov retail sales report. Nov retail sales (Thu) are expected to increase 0.5%, mainly driven by auto sales. The consensus is looking for a 0.2% rise …
Norges Bank kept its key rates unchanged at 1.50% as expected. The new interest rate forecast indicates unchanged rates until a first hike in summer 2015. Survey of petroleum investments indicates moderate growth in 2014
New interest rate forecast Norges Bank will publish its interest rate decision on 5 December at 10.00 CET. It will also present a new interest rate forecast. In addition Norges Bank will present background material for its advice on the …
Next week’s most important US data releases are the Nov employment report and the Nov ISM manufacturing survey. We expect payrolls to come in at 170k (consensus at 183k) and ISM to come in at 55 in line with consensus.
I dagens websending snakker Erik Bruce og Gaute Langeland om når den amerikanske sentralbanken kan starte nedtrappingen av kjøpene av lange rentepapirer («tapering»). Forrige ukes referat fra siste rentemøte ga en del signaler om når det kan skje og om …
The flash inflation print from the Euro zone will be closely watched next week. In addition, plenty of data out from Norway and Sweden with possibly large impact ahead of the upcoming Riksbank and Norges Bank meetings.
We expect somewhat higher growth in Q3 than in Q2, but marginally on the downside to Norges Bank.
Important sentiment indicators will be closely watched from the Euro zone next week, including IFO and flash PMIs. In addition, we will get CPI from the US, Flash PMIs from China and growth numbers from Norway. Much more in the Week Ahead!
• Somewhat higher core inflation • But still well below Norges Bank’s view • But weaker NOK more than enough to offset lower inflation
Next week will be full of important GDP numbers from the Euro zone. In addition, inflation numbers will be out from both Norway and Sweden and will be key for the central banks.
The new government’s budget somewhat more expansionary than the previous, but no significant effect on Norges Bank’s view.
Core inflation fell from 2.5% in August to 1.7% in September surprising everybody including Norges Bank. We believe inflation increased to 2% in October which will be published 11 November at 10.00. That will still be 0.3% points below Norges Bank, but the gap will decrease from 0.5 to 0.3% points
The Norwegian housing market is weaker than feared and this will have a significant and negative impact on construction and private consumption. This in turn means that GDP growth will be well below Norges Bank’s forecast for the next years. The result is two rate cuts from Norges Bank in 2014.
“Norges Bank right now” is a new publication in which we compare the development in some key variables relative to the forecast made in the last Monetary Policy Report or the situation when the report was made.
Forrige uke fikk vi svake inflasjonstall fra Eurosonen og det har igjen brakt rentekutt på agendaen. ECB holder rentemøte denne uken og det er ventet at Draghi vil holde alle dører for ytterligere lettelser åpne. Et eventuelt rentekutt vil trolig …
Today’s figures points in somewhat different directions. We give most weight to the unemployment figures. It confirms that growth is slower in mainland Norway. But so far not significantly more than Norges Bank’s forecast. Still we continue to believe 2014 will be weaker than Norges Bank’s forecast.
Moderat vekst eller tilbakeslag? Det er klare tegn til svakhet i boligmarkedet samtidig som forbruksveksten har stoppet helt opp. Vi har ikke problem med å forstå hvorfor veksten i norsk økonomi dempes, men hvorfor økonomien skulle stoppe helt opp er …
Next week´s FOMC meeting will be important for the market´s tapering expectation and we expect a signal that tapering is off the table for this year. In addition, inflation numbers from the Euro zone will be closely watched, and any downside surprise would likely put additional pressure on the ECB to ease further.
There was no clear conclusion on whether Norges Bank still sticks to the interest rate path from September or not. However it indicates that it has not changed view significantly
Norges Bank will most likely conclude that NOK has been on the weak side, but on the other hand figures for inflation/growth/capacity utilization have also been slightly weaker than expected. It will by that indicate that is has not changed view on interest rates significantly. That is probably also what the market expects from Norges Bnak so no strong market reaction is expected.
We change our call on Norges Bank and now see rates on hold all of next year.
After today’s figure we see it as more likely that Norges Bank will be on hold next year. But remember NOK is currently 4% weaker than Norges Bank Q 4 forecast. It will give higher inflation looking ahead
Both consensus, Norges Bank and we do not believe so and forecast core inflation to drop to 2.2% from 2.5% last month. Nothing much will happen if we are right. But what if we are wrong?
Det store temaet forrige uke var budsjettforhandlingene i USA og nedstengningen av offentlig sektor. Noen nøkkeltall fikk vi også, blant annet en sterk ISM fra industrien og gode tall for «jobless claims». Denne uken vil nok USA fortsatt få en del oppmerksomhet, men fra Norge er det særlig inflasjonstallene for september som vil være i fokus.
Norges Bank forecasts an unemployment rate at 3 ½% this year and rather healthy growth in employment. That is well in line with the LFS figures
Norges Bank hevet rentebanen, men ikke mye I følge Norges Banks nye renteprognose får vi én renteøkning neste år og den kommer en gang mellom mars og oktober. Det er et litt annet bilde enn banken tegnet i juni, da …
Next week´s key events US The coming week’s calendar, while sizeable, has mostly second-tier data releases, but there will be plenty of Fed speakers to keep markets busy. Look out for hints on the subject of tapering. Euro zone …
Norges Bank kept its key rates unchanged at 1.50% as expected. The rate forecast was revised up from the March report, but to a much smaller extent than what we had expected. There is one hike next year in the path, most …
Norges bank keeps rates on hold and although it revised up the interest rate path, the revision is far lower than we had expected. Norges Bank has put relatively more weight on the weakening outlook for the domestic economy and less on the recently …
Norges Bank will raise its interest rate forecast Probably more than what is currently priced in New interest rate forecast Norges Bank will publish its interest rate decision on 19 September at 10.00. It will also present a new …
All eyes on the FOMC meeting next week. We expect the Fed to reduce the pace of its monthly bond purchases by USD 15bn, to USD 70bn. Focus will also be on Norges Bank interest rate meeting. Stay tuned for an exciting next week!
Much higher inflation means an early hike
The August core inflation to be published 10 September could have a huge impact on the upcoming Norges Bank interest rate forecast and consequently NOK and forward rates.
Vi fikk noe blandede tall fra USA forrige uke. Vi fikk en sterk ISM og gode “jobless claims”, men de viktige non-farm payrolls var noe svakere enn ventet, men vi tror fortsatt at Fed vil trappe ned stimulansene på møtet …
With all focus still on Fed tapering, markets are obviously still very sensitive to incoming economic data. In the light of that, retail sales and consumer confidence are on top of next week’s US agenda. In addition, industrial production numbers from the Euro zone, unemployment from Sweden and much more. Stay tuned for an exciting week!
The market clearly believes that inflation uptick was a flash in the pan - we do not think so. Short rates should move higher and NOK will become stronger when this becomes clear
Clearly weaker GDP growth than expected Will however not counteract strong inflation GDP growth in Mainland Norway was 0.2% q/q in Q2 (1.7% y/y). Our forecast, consensus and Norges Bank was 0.7%. Growth in Q1 was 0.6% q/q, revised down …
Inflasjonsbildet endret I juli gjorde underliggende inflasjon i Norge et hopp opp til 1,8 % fra 1,4 % i juni, og endte med det ½ %poeng over Norges Bank sin prognose. Dermed var underliggende inflasjon der vi trodde den skulle …
If we are right the real economy will develop in line with Norges Bank’s view and the August inflation figure out on 10 September will be the main event going forward. If core inflation again ends up well above Norges Bank’s forecast a cut is ruled out and the question will be when the first hike will be. The market is not priced for that at the moment.
The 2013 parliamentary election in Norway will most likely mean a change of government. We see no reason to change the view on the business cycle, Norges Bank or NOK significantly. Fiscal policy will be expansionary the coming years regardless of government
Today’s figure clearly points to an upward revision of the inflation and interest rate forecast in the coming Norges Bank September report. A rate cut is no longer on the agenda.
• Core inflation will drop • The gap to Norges Bank will not change from June, most likely … Core inflation in Norway will most likely drop in July from 1.4% in June. We forecast 1.2% in July in line …
Denne uken er det Norge og norske inflasjonstall som er i fokus. Vi venter en nedgang i underliggende inflasjon i juli, til 1,2 %. Ikke nok til å trigge kutt i september gitt det øvrige bildet av norsk økonomi, men skulle vi komme enda laver enn 1,2% vil september kutt komme på agendaen.
Norges Bank will most likely conclude that registered unemployment is about as expected, but that LFS unemployment is lower
LFS unemployment is now about ¼%point lower than forecasted by Norges Bank (average for 2013). We will not make too much of this, but if anything it increases the likelihood of unchanged rates in September
Our core inflation forecast is in line with Norges Bank’s forecast and if we are right nothing much will happen in the market.
Lange renter har falt noe og aksjemarkedet er noe opp siste uke. Fed uttalelser og redusert bekymring for Kinas økonomi ligger bak. Denne uken kommer det for tiden klart viktigste nøkkeltallet den amerikanske sysselsettingsrapporten. I tillegg er det rentemøte i …
The strong trend in retail sales is for real and registered unemployment was lower than we had expected.
Nedjustering På rentemøtet i juni la Norges Bank fram en renteprognose som på det meste var nedjustert med 45 bp sammenlignet med prognosen fra mars. Prognosen indikerer en 50% sjanse for et kutt på septembermøtet dersom utviklingen blir som Norges …
• LFS unemployment fell unexpectedly • Now points to lower unemployment than Norges Bank forecast • Reduces the chance of a September rate cut Contrary to both consensus and Nordea’s forecast, LFS unemployment fell from 3.7% in March to 3.5% …
Norges Bank holdt som ventet renten uendret på 1,5 % på dagens rentemøte, men overrasket stort med en solid nedjustering av rentebanen. Den nye rentebanen indikerer nå like stor sannsynlighet for rentekutt og for uendret rente på rentemøtet i september. Våre analytikere Katrine Boye og Erik Bruce kommenterer den nye rentebanen i Nordea WebTV.
Norges Bank kept its key rates unchanged at 1.50% as expected. The rate forecast was however significantly revised down from the March report. The rate path has a 50% chance for a 25bp cut in September. Then rates will be …
As we see it the market is not prepared for an upward revision of the interest rate forecast. By taking out the rather high probability for a cut in Q3 and forecast a somewhat earlier hike, market rates should move upwards and NOK should strengthen. We are rather uncertain about Norges Bank’s view on the domestic economy. It could revise down its view more significantly than we believe, especially after its recent rather downbeat busniess survey. In that case the path should look very much as in March. In that case we do not think much will happen in the market. We see the chance of a lower path than in March, which could trigger a weaker NOK and lower rates, as less likely.
Norges Bank has found out that it published a wrong CPIXE figure (its favorite core inflation measure) in April. It was 1.4% not 1.2% in April. In May CPIXE was 1.3%. This means that CPIXE was 0.4%-points above forecast in …
Inflation will have only a minor contribution in lifting the interest rate forecast
If we are right core inflation measured by CPIXE will on average since the publication of the March interest rate forecast be fully in line with Norges Bank’s forecast. That means current inflation should not have any significant impact on the upcoming new interest rate forecast from Norges Bank.
• Unemployment increased by 1700 persons in May • Clear upward trend which argues for a lower rate path • Strong credit growth, but not that strong impact on rates
Norges Bank vil ikke ignore at AKU ledigheten øker
Norges Bank has to take the rather strong upward trend in LFS unemployment into consideration at the next meeting. Not that we think this will trigger a rate cut, but all other equal it argues for a later hike in the coming interest rate forecast.
Ser ikke ut til å bli kutt På rentemøtet tidlig i mai antydet Norges Bank at rentprognosen fra mars fortsatt gjelder. Et mer moderat lønnsoppgjør enn ventet, lavere inflasjon og forventninger om noe lavere renter ute tilsa noe lavere rente …
Sjefen i den amerikanske sentralbanken, Ben Bernanke, skal på onsdag på høring i Kongressen om de økonomiske utsiktene i amerikansk økonomi. Markedet vil følge nøye med på om Bernanke gir noen indikasjoner om når og hvordan de kvantitative lettelsene skal nedskaleres. Senioranalytiker …
• Q4 was a soft spot and mainland growth in Q1 is about as expected • No need for Norges Bank to change view based on today’s figures. GDP growth in Mainland Norway was 0.7% q/q in Q1. Our forecast …
There is no reason to change view on Norges Bank if we are right, but if growth ends up say below 0.5% we will start thinking about a June cut again.
Denne uken retter markedet oppmerksomheten mot flashestimatet på BNP-tallene fra eurosonen for første kvartal. Det er ventet en betydelig bedring fra fjerde kvartal, med Tyskland trolig tilbake på positiv vekst. Her hjemme får vi et nytt bevis på at Norge er “anderledes-landet”. …
We usually do not comment on the release of CPIXE Norges Banks favourite measure for core inflation. But this time it’s necessary. CPIX came out at 1.2% (published on http://www.norges-bank.no/en/price-stability/inflation/table-cpi-cpi-ate-cpi-trimmed-mean-cpi-weighted-median/ at 14.00) compared to 0.9% last month. That is only …
Needless to say the chance of a June cut fell strongly on today’s figure. However a rate hike is not agenda, remember Norges Bank rate forecast was biased to the downside. NOK will probably also strengthen on the reduced chances of a cut.
If we are right and core inflation is back on Norges Bank’s forecast the chance of a June cut will be reduced and we should see somewhat stronger NOK
This was as we had expected and we see no reason to change our view of unchanged rates also in June.
It will be hard for Norges Bank to avoid the conclusion that fiscal policy is slightly more expansionary than expected. But the difference is too small to have any strong impact on rates going forward
• Weaker NOK counteract lower wage growth • Could say it considered a cut – but will probably not • Stronger NOK and higher forward rates if we are right. • Leakages from revised budget strengthen our belief in unchanged …
Forrige uke var begivenhetsrik med både rentekutt fra ECB og gode arbeidsmarkedstall fra USA. Denne uken vender vi fokus mot norsk økonomi der det er rentemøte i Norges Bank. Sjefanalytiker Erik Bruce forteller deg alt om rentemøtet i Norges Bank i Nordea …
Unemployment figures in line with Norges Bank forecast.
Lower retail sales than we had expected, but stronger labour market figures. What will be Norges Bank's conclusion?
Weak NOK makes a rate cut in May unlikely. But what about June?
Den norske krona har svekket seg betydelig den siste tiden og på kort sikt er det rom for ytterligere svekkelse. Sjefanalytiker Erik Brucegir deg årsaken til kronesvekkelsen og avslører hva vi tror om norske kroner fremover.
Norges Bank har allerede indikert en viss sansynlighet for rentekutt på rentemøtet i mai. Med forrige ukes svake inflasjonstall samt et moderat lønnsoppgjør i vår er vi nå kommet et steg nærmere et rentekutt. Vi beholder allikevel vår prognose på uendret styringsrente fremover. Senioranalytiker Katrine Boye forklarer deg hvorfor i Nordea WebTV.
We have to think. Cut or not cut in May?
We forecast core inflation (CPI-ATE) at 1.2%, up from 1.1% last month. Consensus is 1.1% 0.1% points higher inflation than consensus will probably not provoke stronger NOK and higher forward rates.
Årets første lønnsoppgjør er i havn og det ble nok litt mer moderat enn Norges Bank ventet. Sjeføkonom Steinar Juel diskuterer hva det kan bety for inflasjonen og rentesettingen fremover. I Japan har sentralbanken lagt om pengepolitikken i langt mer …
Norges Bank mentioned the weaker than expected LFS figures at the last MPC meeting, but did not seem to give that much weight to it. We think that is still the view.
Påsken ble preget av den nye Kypros-avtalen. Markedet reagerte umiddelbart positivt, men stemningen snudde raskt. Den nye løsningen innebærer at både obligasjonseiere og innskytere med store innskudd må ta tap. Denne uken er preget av flere store hendelser, der sysselsettingstallene "non-farm payrolls" og rentemøtet i ECB blir blant de viktigste.
The main picture is still that registered unemployment moves about sideways in line with Norges Banks forecast.
Større sjanse for kutt enn økning i år I sin nye renteprognose skjøv Norges Bank første renteøkning fra sommeren i år til sommeren neste år. De spår uendrede renter fram til da, men på kort sikt er det mer sannsynlig …
Norges Bank holdt som ventet styringsrenten uendret på 1,5 %. Mer overraskende var den kraftige nedjusteringen av den nye rentebanen. Rentebanen indikerer første renteøkning våren 2014, men allerede på førstkommende møte i mai er det en mulighet for et kutt. Også …
More dovish than we expected and a kind of easing bias. We have to look more into the report, but so far we will keep our forecast for a first hike in March 2014. The risk of a cut/later hike has however increased.
If we are right, the main message will be that Norges Bank is on hold. That is in line with market pricing and nothing much will happen
We see the deviation to Norges Bank's forecast to small to have any significant impact on the upcoming new interest rate forecast from Norges Bank.
Core inflation has on average been 0.1% below Norges Bank’s forecast the three last months if we are right. That is probably not enough to have any influence on the coming interest rate forecast
I forrige uke så vi at valget i Italia endte i en kaotisk situasjon, og at de automatiske budsjettkuttene i USA bli gjennomført. Allikevel var markedsreaksjonene små. Erik Bruce forteller deg hvorfor, og vurderer blant annet ukens rentemøte i ECB og fredagens "non-farm payrolls" i denne utgaven av Nordea WebTV.
In total the LFS survey and weak GDP figures in Q4 point to a downward revision of the output gap. But that registered unemployment is stable at a low level argues that the revision will be rather moderate.
The LFS figures could be an indication that growth is slowing and capacity utilization stabilizing. The main argument for higher rates then weakens.
Forrige ukes BNP-tall for fjerde kvartal pekte mot en svak utvikling i den norske fastlandsøkonomien, og var godt på nedsiden av Norges Banks anslag. Samtidig bidro sentralbanksjef Olsens årstale til en svekkelse av krona. Vi fikk også svake BNP-tall fra eurosonen, men allerede denne uken …
All in all today’s figures makes us more certain that Norges Bank will revise down its interest rate forecast in the coming March report. We still do not believe in a cut, but the uncertainty has clearly increased
The Q4 2012 national accounts are due out on 13 February at 10.00 CET. We project mainland GDP growth at 0.2% q/q (2.7% y/y) in Q3 compared to 0.7% q/q (2.9%y/y) in Q3. The consensus estimate, according to Reuters, is …
Strong NOK and the possibility of tighter monetary conditions due to regulations are the main reasons why we believe Norges Bank will postpone the first hike to early 2014.
Consensus is yet not known, but we guess most analysts will predict core inflation at about 1.2% so nothing will happen in the market if we are right
We, and we believe Norges Bank, will give more weight to today’s figures than the LFS unemployment and conclude that unemployment is moving sideways at a rather low level
The likelihood of a rate hike this year in the March Norges Bank interest rate forecast seems small
Flere nøkkeltall overrasket på oppsiden forrige uke, og det er et positivt sentiment i markedet. Denne uken er det flere spennende hendelser med blant annet rentemøte i Fed, amerikanske BNP-tall og “non-farm payrolls”. I tillegg kommer flere nøkkeltall fra Norge. Senioranalytiker …
Inflation will remain below target despite higher imported inflation and higher growth in rents
Lav lønnsvekst i konsumorienterte sektorer kan holde inflasjonen lav
We have only made minor changes to the financial forecasts this time: We have lifted our mid-year target for the EUR/USD to 1.25, made minor changes to the GBP forecast, lowered our 3M EUR/SEK forecast to 8.60 and we have postponed the first hike from Norges Bank to March 2014 and only expect two hikes in 2014.
We have changed our forecast for key rates in Norway. We no longer forecast a hike in October 2013, but have postponed the first hike to March 2014.
Inflation on the downside adds to the picture of key figures being somewhat on the weak side lately.
Core 0.1% points below consensus and Norges Bank will have no effect on the market.
Despit higher than forecasted unemployment today's figure did not change our view.