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June CPI: Surprise Unlikely To Shift Norges Bank Cut Expectations

NORWAY
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Norwegian June inflation is due at 0700BST tomorrow. Consensus and the Norges Bank see CPI-ATE at 3.6% Y/Y (vs 4.1% prior).

  • Following the more hawkish than expected June Norges Bank decision, current consensus is split between a first rate cut in December ‘24 (which would be dovish relative to the Norges Bank’s June rate path) and March ‘25 (more consistent with the rate path).
  • We think that any surprise to CPI-ATE tomorrow will need to be taken alongside the July inflation data (due August 9) before meaningfully altering market expectations for the first cut.
  • Nonetheless, a higher-than-expected reading would see the 20-day EMA at 11.4334 in EURNOK as the first support, with initial resistance at 11.5679 (50% retracement of the May 1 – June 21 sell-off).
  • Looking at the breakdown of the Bloomberg consensus, Danske Bank expect a 3.5% Y/Y CPI-ATE reading while Citi (3.7% Y/Y) and DNB (3.8% Y/Y) hold above-consensus views. See below for DNB’s commentary ahead of the release:

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Norwegian June inflation is due at 0700BST tomorrow. Consensus and the Norges Bank see CPI-ATE at 3.6% Y/Y (vs 4.1% prior).

  • Following the more hawkish than expected June Norges Bank decision, current consensus is split between a first rate cut in December ‘24 (which would be dovish relative to the Norges Bank’s June rate path) and March ‘25 (more consistent with the rate path).
  • We think that any surprise to CPI-ATE tomorrow will need to be taken alongside the July inflation data (due August 9) before meaningfully altering market expectations for the first cut.
  • Nonetheless, a higher-than-expected reading would see the 20-day EMA at 11.4334 in EURNOK as the first support, with initial resistance at 11.5679 (50% retracement of the May 1 – June 21 sell-off).
  • Looking at the breakdown of the Bloomberg consensus, Danske Bank expect a 3.5% Y/Y CPI-ATE reading while Citi (3.7% Y/Y) and DNB (3.8% Y/Y) hold above-consensus views. See below for DNB’s commentary ahead of the release: