Scandi Markets Ahead: Inflation To Fall In Scandinavia In July
Danske Markets | Aug 10, 2015 05:11AM ET
In Sweden , we expect July inflation (due Thursday) to be scrutinised by markets and the Riksbank alike. On the back of additional stimulus from lower energy prices, we estimate CPIF inflation undershot the Riksbank's forecast by as much as 0.3pp in July.
We are also due to get the monthly Prospera survey on markets' inflation expectations (Wednesday), with expectations for one and two years having edged higher over the past few months, albeit still 0.5pp and 1.0pp below target. This will be the final inflation expectations survey ahead of the September meeting.
The main event in the Norwegian market is July inflation data, which is due to be published on Monday. The core inflation data (CPI-ATE) for June surprised strongly on the upside, rising 0.5% m/m and 3.2% y/y, well above expectations. This time we assume that we will see a setback in the price of airline tickets after two months, with prices rising close to 40%. We also assume that food prices will rise only moderately following the price increases over the past two months. Hence, we forecast a m/m rise of 0.1%, which corresponds to a fall in the y/y rate for the CPI-ATE measure from 3.2% to 2.6%. Hence, we expect inflation to be more or less back at the inflation target but still somewhat above Norges Bank's forecast of 2.2% for July.
In Denmark , the statistical office is due to release a raft of interesting data in the coming week. These include figures for inflation, which we estimate slowed from 0.7% in June to 0.4% in July.
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