NORWAY: Steady Credit Growth In February; Divergence Across Sectors
Norwegian February credit growth was steady at 3.6% Y/Y, but this masked diverging developments across major sectors. Overall, we view the weak development in corporate lending growth as a reflection of sluggish mainland demand, particularly in rate-sensitive sectors. Tomorrow’s Norges Bank decision remains a close call between a hold and 25bp cut. See our preview here.
- Non-financial corporate credit growth fell back to 1.5% Y/Y (vs 1.9% in January, 1.4% in February). Corporate loan demand remains sluggish against a backdrop of high policy rates. The press release notes that “the majority of domestic debt to companies is related to property and property development, and the low credit growth can also be seen in, among other things, the low number of housing project starts”. We note that the strong development in existing home prices over the past year has partly been a function of low new home supply.
- Household lending growth ticked up to 4.0% Y/Y (vs 3.9% prior), continuing a gradually increasing trend. The relaxation of mortgage regulations “does not yet appear to have had a significant impact on household total debt growth” for now, but will likely provide support in the coming months.
- Municipal government lending growth rose more notably to 7.9% Y/Y (vs 7.2% prior).
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BTP TECHS: (H5) Support Stays Intact For Now
- RES 4: 122.85 High Dec 12
- RES 3: 121.88 76.4% retracement of the Dec 11 - Jan 13 bear leg
- RES 2: 120.98/121.00 61.8% of Dec 11 - Jan 13 bear leg / High Feb 7
- RES 1: 120.47 High Feb 13
- PRICE: 119.82 @ Close Feb 21
- SUP 1: 118.95 Low Feb 19
- SUP 2: 118.65/117.16 Low Jan 24 / 13 and the bear trigger
- SUP 3: 116.59 76.4% retrace of the Jun - Dec ‘24 bull cycle (cont)
- SUP 4: 116.07 Low Jul 8 ‘24 (cont)
A bullish cycle in BTP futures remains intact and the latest pullback appears corrective - for now. A stronger reversal higher would refocus attention on 120.98 (recently pierced) and 121.88, Fibonacci retracement points. On the downside, initial key support to watch lies at 118.65, the Jan 24 low. Clearance of this price point would instead highlight a reversal and the end of the corrective bull cycle. First support lies at 118.95, the Feb 19 low.
RATINGS: Affirmations For Austria & Finland On Friday
Sovereign rating reviews of note from after hours on Friday include:
- Moody's affirmed Austria at Aa1, outlook stable
- Scope Ratings affirmed Finland at AA+; Outlook Stable
USDJPY TECHS: Bears Remain In The Driver’s Seat
- RES 4: 154.80 High Dec 12 ‘24 and a key resistance
- RES 3: 153.70 50-day EMA
- RES 2: 152.62 20-day EMA
- RES 1: 150.74 High Feb 21
- PRICE: 149.46 @ 07:06 GMT Feb 24
- SUP 1: 148.85 Intraday low
- SUP 2: 148.65 Low Dec 3 ‘24 and a key support
- SUP 3: 148.01 Low Oct 9 ‘24
- SUP 4: 146.95 61.8% retracement of the Sep 16 ‘24 - Jan 10 bull leg
USDJPY bears remain in the driver’s seat and the pair has again traded to a fresh short-term cycle low, today. The move down has exposed the next key support at 148.65, the Dec 3 ‘24 low. A break of this level would strengthen a bearish condition and pave the way for an extension towards 146.95, a Fibonacci retracement. On the upside, initial firm resistance to watch is 152.62, the 20-day EMA.
