Forex Flash: NOK Inflation Stronger that Expected - TD Securities

FXstreet.com (London) - Tim Davis at TD Securities said in a report that the Norwegian inflation was stronger than expected with headline CPI at 1.9% Y/Y (mkt 1.5%), and underlying CPI at 1.5% (mkt 1.0%, Norges Bank 1.1%). He said that food prices were a big driver, with 1.1% M/M gain in April (this is NSA data) the strongest April reading in the last decade at least.

However, he notes that with food prices soft last month due to the timing of Easter, this is not quite as big a rise as it appears at first glance. He also points out however, that the housing/fuels category also increased more than normal for April and the recreation component was also stronger than normal for April. ’So all in all, even ignoring the move in food prices, the CPI-ATE is still a little stronger than the Norges Bank had forecast in March', as Tim Davis sums this up.