NORWAY: Solid Mainland Growth In Q1 Driven By Consumption And Investment
Norway Q1 mainland GDP was a solid 1.0% Q/Q – consistent with the “incorrect” figures published by Statistics Norway on Tuesday. That’s notably above Norges Bank’s 0.6% projection from the March MPR, so will have a net hawkish impact on the June MPR rate path, and possibly temper any expectations for a cut at that meeting.
- The surprise to Norges Bank’s projection appears to be driven by both consumption and mainland investment.
- Consumption growth was 1.5% Q/Q (vs -0.3% prior), above Norges Bank’s 0.7% projection. Statistics Norway highlights “strong growth in retail trade, a sharp upswing in car purchases before announced tax changes, as well as other household goods”.
- Meanwhile, mainland business investment was 1.1% Q/Q (vs 1.7% prior, -0.7% Norges Bank) and housing investment rebounded to 0.4% Q/Q (vs -14.8% prior, -2.2% Norges Bank). Business investment was likely supported by high electricity production.
- Traditional goods exports rose 0.3% Q/Q (vs 3.3% prior) while services exports fell 1.5% Q/Q (vs +5.0% prior). Goods imports were flat Q/Q (vs 3.4% prior) while services imports fell 0.2% Q/Q (vs +0.2% prior).
- Government spending rose 0.4% Q/Q (vs 0.5% prior) while government investment fell sharply by 9.3% Q/Q (vs -0.7% prior).
- Mainland GDP fell 0.1% Q/Q (vs -0.9% prior), the third consecutive negative sequential reading. Petroleum investment was weak at -10.0% Q/Q. Norges Bank had projected a flat reading. Meanwhile, crude and gas exports fell 3.1% Q/Q, "primarily driven by lower oil production".
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EQUITY TECHS: E-MINI S&P: (M5) Corrective Cycle Still In Play
- RES 4: 5906.75 High Mar 6
- RES 3: 5837.25 High Mar 25 and the reversal trigger
- RES 2: 5713.01 50-day EMA
- RES 1: 5505.38 20-day EMA
- PRICE: 5433.75 @ 07:21 BST Apr 15
- SUP 1: 5098.16 61.8% retracement of the Apr 7 - 10 bounce
- SUP 2: 4832.00 Low Apr 7 and the bear trigger
- SUP 3: 4760.88 1.618 proj of the Feb 19 - Mar 13 - 25 price swing
- SUP 4: 4663.75 1.764 proj of the Feb 19 - Mar 13 - 25 price swing
A short-term reversal higher in S&P E-Minis last week highlights the start of a corrective cycle. The trend condition has been oversold following recent weakness and the move higher is allowing this set-up to unwind. Initial resistance to watch is 5524.91, the 20-day EMA. Resistance at the 50-day EMA is at 5737.71. On the downside, key support and the bear trigger has been defined at 4832.00, the Apr 7 low.
WTI TECHS: (K5) Corrective Cycle
- RES 4: $74.66 - High Jan 22
- RES 3: $72.91 - High Feb 11
- RES 2: $67.32/72.28 - 50-day EMA / High Apr 2 and key resistance
- RES 1: $64.85 Low Mar 5 low and a recent breakout level.
- PRICE: $61.69 @ 07:19 BST Apr 15
- SUP 1: $55.12 - Low Apr 9
- SUP 2: $54.26 - 2.236 proj of the Feb 11 - Mar 5 - Apr 2 price swing
- SUP 3: $56.81 - 2.382 proj of the Jan 15 - Feb 4 - 11 price swing
- SUP 4: $50.00 - Psychological round number
A bearish theme in WTI futures remains intact and the rally last Wednesday is - for now - considered corrective. The move higher is allowing an oversold trend condition to unwind. Recent weakness has resulted in the breach of a number of important support levels, reinforcing a bearish threat. A resumption of the bear cycle would open $54.26, a Fibonacci projection. Initial firm resistance is seen at $64.85, the Mar 5 low and a recent breakout level.
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