Lower Than Expected CPI-ATE Cements Norges Bank Hold In Jan

Norwegian December CPI came in 0.1pp softer than expected on an annual basis for both headline and core. NOK initially saw limited reaction to the release, as today's print does not change the Norges Bank's course of action at the upcoming meeting (Jan 25) or the policy path much going forwards. Since then, NOK has strengthened somewhat vs the EUR and SEK.

• The Norges Bank are firmly expected to remain on hold at the next meeting, and today's softer print will only cement this case.
• CPI-ATE was +5.5% Y/Y (vs +5.6% cons and NB; +5.8% prior) and +0.2% M/M (vs +0.2% cons, -0.2% prior). Headline was +4.8% Y/Y (vs +4.9% cons and NB; +4.8% prior) and 0.1% M/M (vs 0.2% cons; 0.5% prior).
• The press release notes that NSA food/non-alcoholic beverage prices fell -2.0% M/M in December, due to Christmas period offers.
• Within core goods, furniture and electronic goods prices rose on the month following November sales, but on an annual basis they fell. Looking at services, hotel and restaurant prices were flat on the month, while recreation and culture rose +1.1% M/M. Both components decelerated on an annual basis but remain at 6.1% Y/Y and 7.4% Y/Y respectively.
• Housing utilities rose +1.3% Y/Y (vs +0.5% prior), but just +0.2% M/M (vs +3.4% prior) as electricity including grid rent fell -13.8% M/M, but motor fuels rose +2.9% M/M.