Expect high inflation numbers – E24

– Here at home, Norway’s inflation numbers are very exciting, says Kjersti Haugland, chief economist at DNB Markets.

On Wednesday next week, new figures for price growth will be available in Norway, a number that is being closely watched.

– It is important, because on Thursday in two weeks there is an interest rate meeting at Norges Bank, says Haugland.

Inflation is an increase in the consumer price index (CPI). This describes the development in the prices of goods and services demanded by private families living in Norway.

Expect high inflation

The CPI rose by 6.3 percent from June 2021 to June 2022. It was 0.6 percentage points higher than the twelve-month change in May, which was already at a very high level.

June inflation figures were significantly higher than the Norges Bank had expected, Hoagland says.

It says the deviation for July is expected to be even higher.

– While the central bank expects core inflation to decrease and fall at 3.2 percent, we believe there is another increase in core inflation to 3.8 percent.

Kjetil Olsen, Nordea’s chief financial officer, says he thinks core inflation is 4 per cent. He explains the high inflation expectations with the sharp rise in food prices as a result of increased costs for producers of raw materials.

The SAS strike may also have contributed to the growth, in the form of airlines being able to raise their ticket prices while the strike continues, he says.

Haugland says that if inflation for July also rises more than the central bank’s forecast indicates, that raises the possibility of two rate hikes at the August rate meeting.

Inflation figures in the United States

On Wednesday, US inflation figures will be released. DNB’s Kjersti Haugland expects overall inflation to decline slightly in July.

Inflation in the United States is a major concern. It says core inflation is expected to rise more than the already very high level.

Hoagland goes on to say that monetary policy in the US is “a very important driver of stock markets and international interest rates”.

For financial markets, there is no doubt that the inflation numbers in the United States are the most important, she says.

Inflation figures in Sweden

Marius Hof of Handelsbanken points to Sweden’s inflation figures as interesting, and says they are also expected to be high.

– Riksbank expects core inflation excluding energy goods, a measure they use in Sweden, to rise to 5.8 percent, while analysts expect 6.5 percent, it says.

He says that many believe inflation there is slightly higher than analysts’ expectations.

– Hof points out that this means there could be a threefold hike in interest rates from the Riksbank in September.

season results

A number of listed companies presented results this summer for the second quarter.

Robert Ness, chief investment officer at Nordea, sums up the results season well, and says companies as a whole delivered better-than-expected numbers.

– In 2021, we made record profits on the Oslo Stock Exchange. In 2022, profits are expected to be 50 percent higher than they were in 2021, he says.

Ness says the profits are largely due to the oil companies.

– The companies that mean the most in kroner and øre are Equinor and Aker BP. Good results were expected, and they gave a little better than expected, he says.

– DNB and Storebrand also provided good numbers.

Among those who were negatively surprised, he chose Nordic Semiconductor, Schibsted and Scatec.

What companies will you follow next week?

Thursday, Nel, Kahoot, Pexip and Hexagon will present their quarterly reports, as well as several banks.

He says Kongsberg Automotive releases its numbers on Tuesday.

– It’s exciting, because their numbers fluctuate a lot from quarter to quarter. He says they are being affected by global commodity pressures, but are expected to turn a solid profit.