– Previous interest rate cuts can be referred to – E24

– Previous interest rate cuts can be referred to – E24

On Friday, Statistics Norway publishes inflation figures for January. “There are very large gaps in estimates,” says the chief economist.

Published:

– Inflation numbers will be important in light of future monetary policy expectations, Marius Gunsholt Hof, chief economist at Handelsbanken, tells E24.

High price growth in the past two years has led to the highest level of interest rates since 2008. Before Christmas, Norges Bank announced a rate cut in 2024. But can people with expensive mortgages hope that relief will come sooner?

– Previous cuts in interest rates can be noted

In December it fell Core inflationCore inflationPrices increase if you ignore energy prices and changes in taxesThat's what the central bank cares about more than anything else, to 5.5 per cent – ​​slightly lower than Norges Bank's estimate. The slight deviation was not enough to impact interest rate expectations, according to Hof.

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Economists now expect a further decline to 5.3 percent in January, according to a Bloomberg survey. Handelsbanken estimates a decrease to 5.2 percent.

If things go as we expect, price inflation will start to be a few tenths lower than Norges Bank envisioned. All other things being equal, this could signal earlier interest rate cuts than Norges Bank had expected, the chief economist says.

At the same time, he stresses that there is uncertainty regarding January numbers.

– There are very large gaps in estimates. A number of price adjustments are also made in January, the impact of which cannot necessarily be calculated in advance.

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– Quite a big change

This may pave the way for a surprise.

But even if the numbers turn out to be positive for the interest rate outlook, Hof believes it will take some time anyway before the central bank starts sniffing out interest rate cuts.

Core inflation is high when compared with our trading partners. He says: We are close to the summit, but at the same time we are a little behind the road.

The depreciation of the krone last year and higher wage growth means that it will take some time to bring down price growth.

– Since the new year, the international interest rate picture has risen slightly again. This is a very big shift.

While the market was previously anticipating a high probability of a U.S. interest rate cut as early as March, a majority now believes interest rates will only fall in May, according to Continuing medical education monitoring tool.

– Norges Bank will not be the first to cut interest rates. The continued flow of strong numbers from the US means that the odds of an interest rate cut there have decreased. The prospect of lower interest rates here at home is also being pushed, the chief economist says.

Waiting for the fall of the stock market giants

Among other events on the calendar next week are the results of several heavyweight events in Oslo Bors.

Results season has already begun, but there will be a real boost next week with the release of numbers from giants such as Aker BP and Equinor. Other companies that will come under fire are Kongsberg Gruppen, car shipping company Höegh Autoliners and XXL, to name a few.

Oil and gas companies are likely to achieve worse results than last year, Mads Johansson, investment economist at Nordnet, tells E24.

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Investment expert Mads Johansson at Nordnet.

The winter on the continent was warmer than expected, and gas stores were full. This means that gas prices have fallen a lot, and Equinor, which sells a lot of gas, will likely achieve lower results.

It also reminds us that gas prices have been very high in the past couple of years.

In addition, the price of oil moved between $70 and $80, which is lower than a year ago when it was around $90. So this will likely impact the results of both Aker BP and Equinor, says Johansson.

– The death of one is the bread of the other

Among the companies likely to see a recovery, the investment economist pointed to Höegh Autoliners, Kongsberg Gruppen and Yara.

– The death of one is the bread of the other. While Equinor loses due to lower gas prices, Yara benefits from the decline because gas is its largest investment vehicle. With gas prices falling and demand remaining stable, it is reasonable to believe they will be able to do well.

Johansson says the turbulent times the world is going through mean that car shippers like Höegh Autoliners can currently tie up contracts at high levels.

The same mechanisms apply to the Kongsberg group.

-They were giant-«PerformerPerformerPerformer“This year. Unfortunately for good reason due to the turmoil in the world, which contributes to increased sales of weapons and ammunition. I assume that the results will be good, so it remains to be seen how good they will be, says the investment economist.

– A little weaker than usual

Next week will also present house price figures from Eiendom Norge. They will actually arrive on Monday at 11am.

-January is the month when there is usually strong price growth, but it is a seasonal effect. “After adjusting for this situation, we think there will be a slight decline,” says Hof.

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– When do you expect this to turn around?

-We believe that the housing market will develop a little weaker than usual during the winter, but it may actually start to improve in the spring. But the strength of the recovery will depend on when Norges Bank lowers interest rates.

Dalila Awolowo

Dalila Awolowo

"Explorer. Unapologetic entrepreneur. Alcohol fanatic. Certified writer. Wannabe tv evangelist. Twitter fanatic. Student. Web scholar. Travel buff."

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