Sell-side Mixed On December Hike Prospects (2/2)

Below we summarise a number of sell-side views following the release, where some analysts now see no hike in December, contrary to Norges Bank guidance.

Handelsbanken: Continue to expect no further hikes in November or December

• "Price inflation for both imported goods as well as domestically produced goods and services was lower than expected by Norges Bank in September"
• "The data further confirms that the core inflation rate is trending downwards, and, at present, along a steeper path than assumed by Norges Bank".

Nomura: Still expect a December hike

• "Collapsing electricity prices were the main driver of weaker headline inflation."
• Nomura are "reluctant to jump to any conclusions that this is a clear shift in underlying inflation momentum", since CPI-ATE includes food, alcohol and tobacco, which were a major driver in the September weakness.

Nordea: Now think the Norges Bank will hold in December

• "Most categories were behind the fall in core inflation, in particular food, furniture and transportation".#
• "It is most likely that both core and headline inflation will be below Norges Bank’s view until year end and this puts Norges Bank’s December hike in question".

SEB: Expect Norges Bank to retain flexibility in November

• "CPI-ATE ex food, alcohol and tobacco slowed to 5.1% y/y from 5.7% y/y in August".
• "Lagging food prices and a weak exchange rate is still expected to make the downturn for inflation in Norway more gradual".
• "Since there will be no more inflation release ahead of the Nov 2nd interim decision, the guidance in the statement will be very important".

Swedbank: December hike dependent on next two CPI prints

• "Given the grocery stores’ announced change in price setting, it might not come as a surprise that food prices are more volatile now".
• Swedbank note that while CPI-ATE remains too high, positive notes from the release are that domestic goods (ex-energy, food) seem to be peaking, food PPI continues to fall, NOK base effects are lower and labour-intensive services inflation remains fairly flat.