VIEW: Swedbank: CPI Too Hot Not to Handle

Swedbank note that “it was a broad-based uptick in inflation in October, as only clothing and footwear posted a negative monthly change (s.a.). Indeed, the largest contributions this month came from price increases from food and furnishing – recovering from the price declines last month and suggesting that the slump in September inflation was more noise than news.”

• “For Norges Bank, this inflation print should almost put all doubt aside. Our long-held baseline of a last hike to 4.50% seems now to be market consensus as short rates jumped 11-13bps on the news and now price an 80% chance of a hike. We continue to expect inflation to fade fast through first half of next year (just look at the charts) and see no need for additional hikes, rather that the first rate cut will come around summer next year.”