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October CPI Firmer Than Expected, In Line with Norges Bank Forecast


Norway October CPI-ATE came in line with the Norges Bank September forecast of 6.0% Y/Y after undershooting central bank expectations by -0.4pp in September.

  • CPI-ATE came in at 6.0% Y/Y (vs 5.6% Y/Y cons; 5.7% prior) and 0.6% M/M (vs 0.3% cons; 0.4% prior). Headline CPI was 4.0% Y/Y (vs 3.5% cons) and 1.0% M/M (vs 0.5% cons). In unrounded terms, CPI-ATE was 5.97% Y/Y and 0.63% M/M.
  • Looking at the details, the housing, water, electricity, gas and other fuels component was the largest M/M driver as expected, sitting at +2.4% M/M (vs -1.84% prior). This component still fell -2.6% Y/Y vs. -4.9% prior.
  • Food prices also rose +0.9% M/M after a -1.23% print in September. In Y/Y terms, food inflation picked up to +8.5% Y/Y (vs +7.44% prior). Analysts had differing views on where food inflation would print, but this appears higher-than-expected and is a key contributor to the upside surprise in CPI-ATE.
  • Overall, consumer goods ex-energy rose +6.9% Y/Y (vs 6+.52% prior), while serviecs ex-rent rose +6.3% Y/Y (vs +5.70% prior). In monthly terms, both components rose +0.7% M/M, after -1.2% for goods ex-energy and +0.1% for services ex-rent prior.
  • On the surface, this will increase market expectations for a 25bp Norges Bank hike in December, after CPI moved back in line with Norges Bank September projections and overshot market consensus.
  • NOK remains at the top of the G10 following the release, albeit with EURNOK and USDNOK off lowest levels at typing.

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