THE EXECUTIVE BOARD - Norges Bank · Consumer prices, trading partners 4 Twelve-month change....

THE EXECUTIVE BOARD 16 MARCH 2016

Market developments

2

Selected equity price indices 1 Jan. 2015=100. 1 January 15 – 14 March 16

Prices in credit default market, European banking sector CDS indices. Basis points. 1 January 15 – 14 March 16

Source: Bloomberg

0

50

100

150

200

250

300

350

0

50

100

150

200

250

300

350

Jan-15 Apr-15 Jul-15 Oct-15 Jan-16

Senior bank bonds

Subordinated debt

0

20

40

60

80

100

120

140

160

180

0

20

40

60

80

100

120

140

160

180

Jan-15 Apr-15 Jul-15 Oct-15 Jan-16

USEuropeEmerging economiesChina

GDP growth for trading partners

3

Volume. Four-quarter change. Percent. Export weights. 2010 Q1– 2019 Q4

0.5

1

1.5

2

2.5

3

3.5

4

4.5

0.5

1

1.5

2

2.5

3

3.5

4

4.5

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Projections MPR 1/16


Sources: Thomson Reuters and Norges Bank

Consumer prices, trading partners

4

Twelve-month change. Percent. January 2005 – February 20161)

-4

-2

0

2

4

6

8

-4

-2

0

2

4

6

8

2005 2007 2009 2011 2013 2015

Euro area UK Sweden US 1) The latest observation is February 2016 for the euro area and Sweden, and January 2016 for the UK and the US. Source: Thomson Reuters

5

-1

0

1

2

3

-1

0

1

2

3

2012 2013 2014 2015 2016 2017 2018 2019

USEuro areaUKSweden14 March 201611 December 2015

Actual and expected key rates1) Percent. January 2012 – December 2019

1) Broken lines show estimated forward rates at 11 December 2015. Solid lines show forward rates at 14 March 2016. Forward rates are based on Overnight Index Swap (OIS) rates. Sources: Bloomberg, Thomson Reuters and Norges Bank

Money market rates for trading partners1)

6

Percent. 2010 Q1 – 2019 Q4

0

0.5

1

1.5

2

0

0.5

1

1.5

2

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

14 March 2016

MPR 4/15

1) Blue and orange broken lines show forward rates for 14 March 2016 and 11 December 2015. Sources: Thomson Reuters and Norges Bank

Three-month Nibor spread1)

7

Pecentage points. 1 January 2014 – 31 December 20192)

1) Norges Banks estimates of the difference between three-month Nibor and expected key policy rate. Sources: Thomson Reuters and Norges Bank

0

0.1

0.2

0.3

0.4

0.5

0.6

0.7

0.8

0

0.1

0.2

0.3

0.4

0.5

0.6

0.7

0.8

2014 2015 2016 2017 2018 2019

Three-month Nibor spread

MPR 1/16

MPR 4/15

Oil prices

8

USD/barrel. 1 January 2010 – 31 December 2019

0

20

40

60

80

100

120

140

160

0

20

40

60

80

100

120

140

160

2010 2012 2014 2016 2018

Oil priceOil futures prices 14 March 2016Oil futures prices 11 December 2015

Sources: Thomson Reuters and Norges Bank

Import-weighted exchange rate index (I-44)1)

9

1 June 2014 – 31 December 2016

84

88

92

96

100

104

108

112

84

88

92

96

100

104

108

112

Jun-14 Dec-14 Jun-15 Dec-151) A positive slope denotes a weaker krone exchange rate. Source: Norges Bank 9


GDP mainland Norway

10

Four-quarter change. Percent. 2011 Q1 – 2016 Q2

Sources: Statistics Norway and Norges Bank

0

1

2

3

4

0

1

2

3

4

2011 2012 2013 2014 2015 2016

Regional network

SAM MPR 1/16

GDP mainland Norway

Expected output growth next six months, Norges Bank’s regional network1)

11

Annualised. Percent

-6-5-4-3-2-10123

-6-5-4-3-2-10123

August 2015

October 2015

February 2016

Construc-tion

Export industry

Domest.oriented

mfg.

Oil serv. export market

Oil serv. domest.market

Househ. services

Commerc. services

Retail trade

1)The network uses an index from −5 til +5, where −5 indicates that production is expected to decline by 10% or more annualised. Several oil service enterprises expect production to decline by more than 10% in the next six months. This is not reflected in the chart due to the limitations of the index. Source: Norges Bank

Petroleum investment

12

Volume. Annual change. Percent. 2011 – 2019

-20

-15

-10

-5

0

5

10

15

20

-20

-15

-10

-5

0

5

10

15

20

2011 2013 2015 2017 2019

MPR 4/15 MPR 1/16


House prices in the largest cities

13

Twelve-month change. January 2010 – February 2016

-10

-5

0

5

10

15

20

-10

-5

0

5

10

15

20

2010 2011 2012 2013 2014 2015 2016

Oslo BergenTrondheim StavangerTromsø KristiansandDrammen

Sources: Eiendom Norge, FINN and Eiendomsverdi

Credit from selected funding sources to Norwegian non-financial enterprises

14

Twelve-month change. January 2011 – January 2016

-10

0

10

20

30

-10

0

10

20

30

2011 2012 2013 2014 2015 2016

Domestic notes and bonds

Foreign credit (mainland enterprises)

Domestic credit from banks andmortgage companies


Unemployment rate

15

As percentage of the labour force. January 2006 – June 2016

0

1

2

3

4

5

0

1

2

3

4

5

2006 2008 2010 2012 2014 2016

LFS NAV

Sources: Statistics Norway, NAV and Norges Bank

Wage growth in 2016

16

Nominal wage growth. Percent

2.4 2.3 2.6

2.8 2.6

0

1

2

3

0

1

2

3

Managers Employers Employees MPR 4/15 MPR 1/16

Regional network

Expectations survey Projections

Sources: Epinion and Norges Bank

CPI-ATE. Total and by supplier sector

17

Twelve-month change. Percent. January 2014 – June 2016

00.511.522.533.544.55

00.5

11.5

22.5

33.5

44.5

5

Jan-14 Jul-14 Jan-15 Jul-15 Jan-16

CPI-ATEImported consumer goodsDomestically produced goods and servicesProjections MPR 1/16


Expected consumer price inflation 2 and 5 years ahead1)

18

Percent. 2002 Q1 – 2016 Q1

0

1

2

3

4

5

6

0

1

2

3

4

5

6

2002 2005 2008 2011 2014

Expected inflation 2 years ahead Expected inflation 5 years ahead

1) Average of expectations of employer/employee organisations and economists in the financial industry and academia. Sources: Epinion, Opinion, TNS Gallup and Norges Bank

Factors behind changes in the interest rate forecast since MPR 4/15

19

Cumulative contribution. Percentage points. 2016 Q2 – 2018 Q4

-1.5

-1

-0.5

0

0.5

1

1.5

-1.5

-1

-0.5

0

0.5

1

1.5

2016Q2 2016Q4 2017Q2 2017Q4 2018Q2 2018Q4

Exchange rate Foreign demand

Foreign interest rates Money market premium

Domestic demand Wages and prices

Change in interest rate forecast

Source: Norges Bank

Baseline projections in Monetary Policy Report 1/16

20 Sources: Statistics Norway and Norges Bank

Output gap Key policy rate

CPI-ATE Exchange rate (I-44)

0

1

2

3

0

1

2

3

2010 2012 2014 2016 2018

MPR 1/16 MPR 4/15

-3-2-1012

-3-2-1012

2010 2012 2014 2016 2018

0

1

2

3

4

0

1

2

3

4

2010 2012 2014 2016 2018859095100105110

859095

100105110

2010 2012 2014 2016 2018

Private investment Mainland exports

Projections for key economic aggregates

21 Sources: Statistics Norway and Norges Bank

Private consumption and disposable real income GDP mainland Norway

012345

012345

2010 2012 2014 2016 2018012345

012345

2010 2012 2014 2016 2018

Disposable realincome MPR 1/16

0246810

02468

10

2010 2012 2014 2016 2018-10-5051015

-10-505

1015

2010 2012 2014 2016 2018

MPR 1/16 MPR 4/15

Change from previous year. Percent. 2010 – 2019

THE EXECUTIVE BOARD 16 MARCH 2016

THE EXECUTIVE BOARD - Norges Bank · Consumer prices, trading partners 4 Twelve-month change....

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