NORWAY: Volatiles Push Services Higher In June, Momentum Eases To 3.5 Year Low
Norwegian June CPI-ATE inflation was 3.07% Y/Y (vs 2.77% prior, 3.0% consensus and 3.1% Norges Bank). On a seasonally adjusted basis using Statistics Norway data, prices rose 0.3% M/M, the highest sequential print since February. Still, 3m/3m annualised inflation momentum eased to 2.33% from 3.06% in May and 4.11% in April – the lowest reading since December 2021. There’s still another CPI report before Norges Bank’s August 14 decision. Today’s reading is consistent with expectations for a quarterly pace of cuts continuing in September.
- The acceleration in underlying inflation from May was driven by services, with services ex-rent rising to 4.19% Y/Y (vs 3.04% prior) and rents up to 3.78% Y/Y (vs 3.62% prior). Both components saw lower annual rates than in April, though.
- As expected, this was driven by volatile, Easter sensitive, components: Package holidays rose 6.94% Y/Y (vs 0.50% prior) while airfares jumped to 7.36% Y/Y (vs -9.78% prior). However, there wasn’t any notable disinflation in other services components to offset these rises.
- Domestic goods inflation eased to 3.97% Y/Y (vs 5.38% prior), while imported goods ticked up a touch to 1.18% Y/Y (vs 1.02% prior). The NOK has been very volatile through this year, so it’s difficult to confidently ascribe monthly changes in imported goods to exchange rate movements. Clothing inflation pulled back to -4.44% Y/Y (vs -1.75% prior), while food inflation also eased after an uptick in May.
- Headline inflation was 3.0% Y/Y (vs 3.2% cons, 3.1% Norges Bank and 2.8% prior). Electricity including grid rent eased to 8.51% Y/Y (vs 16.82% prior).
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WTI TECHS: (N5) Trading Higher
- RES 4: $72.12 - High Feb 20
- RES 3: $71.10 - High Apr 2 and key resistance
- RES 2: $67.14 - 76.4% retracement of the Apr 2 - 9 bear leg
- RES 1: $65.82 - High Apr 4 2 and key resistance
- PRICE: $65.40 @ 07:13 BST Jun 10
- SUP 1: $59.74/54.33 - Low May 30 / Low April 9 and the bear trigger
- SUP 2: $53.30 - 2.236 proj of the Feb 20 - Mar 5 - Apr 2 price swing
- SUP 3: $52.14 - 2.382 proj of the Jan 15 - Feb 4 - 11 price swing
- SUP 4: $50.00 - Psychological round number
WTI futures are trading higher this week, extending the current bull cycle. The contract has cleared the 50-day EMA and this signals scope for an extension towards $65.82 next, the Apr 4 high. It is still possible that the recovery since early May is a correction. MA studies are in a bear-mode position, highlighting a dominant medium-term downtrend. Support to watch lies at $59.74, the May 30 low. A break would highlight a potential bearish reversal.
GOLD TECHS: Corrective Pullback
- RES 4: $3578.0 - 2.000 proj of the Dec 19 - Feb 24 - Feb 28 swing
- RES 3: $3547.9 - 1.764 proj of the Feb 28 - Apr 3 - Apr 7 price swing
- RES 2: $3435.6/3500.1 - High May 7 / High Apr 22 and bull trigger
- RES 1: $3403.5 - High Jun 5
- PRICE: $3322.9 @ 07:19 BST Jun 10
- SUP 1: $3242.4 - 50-day EMA
- SUP 2: $3121.0 - Low May 15 and key support
- SUP 3: $3085.0 - 61.8% retracement of the Apr 7 - Apr 22 upleg
- SUP 4: $3100.0 - Round number support
A bullish theme in Gold remains intact and the latest pullback appears corrective. Medium-term trend signals are bullish - moving average studies remain in a bull-mode position, highlighting a dominant uptrend. A resumption of gains would refocus attention on $3435.6 next, the May 7 high. A break of this hurdle would strengthen bullish conditions. On the downside, the next support to monitor is $3242.4, the 50-day EMA.
UK DATA: Soft pay growth likely to undershoot BOE's Q2 forecast more than Q1
- Looking at the private regular AWE data in more detail
- There was a downward revision to the single month Y/Y for March 2025 of 0.13ppt to 4.85%Y/Y which saw the 3-month data revised down to 5.51%Y/Y in the 3-months to March 2025 (so that is now 0.25ppt below the BOE's forecast of 5.76%).
- The April single month data was a little softer too at 4.78%Y/Y which puts the 3-months to the end of April at 5.14%Y/Y. Consensus was 5.3%Y/Y - but with this being a "high" 5.1%, we estimate that probably around half the surprise was in the revision and half in the new April cohort. And we also note that estimates did range from 5.2-5.4% from the previews that we wrote so this will be a marginal surprise to some and a larger surprise to others.
- The big picture, however, is that with the revisions the downside miss to the BOE's Q1 forecast has been solidified. And it looks as though we will get an even larger miss in Q2-25 (which the BOE forecast at 5.20%Y/Y). So this is definitely a soft print.
- The one sector which isn't seeing softness is "wholesaling, retailing, hotels and restaurants" which has picked up again in Y/Y terms - but this was largely expected with a large proportion of workers in this sector earning low wages and hence being more impacted by the large minimum wage rises.
- There will be more on the labour market data later today.
