Analyst Views Ahead of December CPI

Tomorrow sees the release of Norwegian CPI for December, with the current bbg consensus expecting CPI-ATE at 5.6% Y/Y (vs 5.8% prior) 0.2% M/M (-0.2% prior).

• The Norges Bank's December MPR projections see CPI-ATE at 5.6% Y/Y and CPI at 4.9% Y/Y.
• While the bar for additional Norges Bank rate hikes is very high after December's 25bps hike, a firmer than expected core CPI print will still play into market expectations around timing for the first phase of easing, currently indicated at between Q4 2024 and Q1 2025 in Dec's MPR.
• Headline CPI is expected at 4.9% Y/Y (vs 4.8% prior), 0.2% M/M (vs 0.5% prior).
• Below, we summarise a selection of analyst views ahead of tomorrow's print:

Nomura: CPI 4.7% Y/Y; CPI-ATE 5.5% Y/Y

• "According to high frequency data from Nord Pool, there should only be a marginal fall in electricity prices in December, but there should be a larger decline in fuel prices".

DNB: CPI 4.8% Y/Y, 0.1% M/M; CPI-ATE 5.5% Y/Y, 0.2% M/M

• "The decline in the core inflation rate YOY was in our view offset by a rise in electricity and fuel prices YOY".
• "Expect food prices to have fallen by 2%, in line with what is typical for December, and prices for furniture and furnishings, etc., and audiovisual equipment to have recovered after marked price declines in November".

SEB: CPI 4.9% Y/Y, 0.2% M/M; CPI-ATE 5.6% Y/Y, 0.2% M/M

• "Food prices normally decline in December, but we expect a slightly smaller decline than normal this year".
• SEB note that upward pressure from last year's weak NOK is still due to come through, while core goods inflation is beginning to ease.
• In services, upside risks continue to be seen from rents and wages but there are "some signs that service prices are turning over".

TD: CPI 5.0%, CPI-ATE 5.6%

• "A notable 3.9% m/m decline in petrol prices will help put downside pressure on headline inflation, however, we expect a bounce back in electricity (3.7% m/m)".

Danske Bank: CPI-ATE 5.6% Y/Y, 0.2% M/M

• Danske look to the weaker NOK through 2023, high wage growth and increasing company margins as drivers behind Norway's higher inflation vs other countries.
• "While we continue to expect a disinflationary trend in 2024, we still believe core inflation held up at 5.6% y/y in December".

Handelsbanken: CPI-ATE 5.6% Y/Y

• Expect annual CPI-ATE to ease on base effects in December, and continue to fall through Q1, aided by the now-stronger NOK.
• "Expect to see that imported price inflation starts to slow more markedly during this winter", which is "highlighted as an important factor behind the announced price cuts on food products".
• Looking ahead, SHB expect CPI-ATE to "gradually below Norges Bank's estimates; supporting both earlier and deeper rate cuts than what is currently indicated by Norges Bank's most recent rate path".