OSLO, Aug 30 (Reuters) - Norwegian retail sales jumped 1.4 percent in July, beating analyst expectations for a 0.3 percent rise, while credit expansion remained steady last month, narrowly missing expectations, fresh data showed on Monday.
The crown was little changed versus the euro after the figures, which did little to alter the view interest rates will stay on hold in the months ahead.
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NORWAY RETAIL SALES (PERCENTAGE CHANGE)
Index July vs July 2010
June vs July 2009
Unadjusted value 129.8 n/a 1.5
Unadjusted volume 122.5 n/a 1.3
Seasonally adjusted volume 116.9 1.4 n/a
NOTES - All figures exclude motor vehicles and petrol. A Reuters survey of 11 analysts had found an average expectation of a rise of 0.3 percent in the seasonally adjusted retail sales volume in July from June, with forecasts ranging from minus 1.0 percent to plus 0.6 percent.
NORWAY GOODS CONSUMPTION (PERCENTAGE CHANGE)
Seasonally adjusted 153.6 +0.7 +2.7
NORWAY CREDIT INDICATOR (PERCENTAGE CHANGE)
July 2010 June 2010 Survey*
vs July 2009 vs June 2009 Overall (C2) debts 4.7 4.7 4.8 Households 6.1 6.2 n/a Non-financial corporations 0.6 0.5 n/a
NOTES: (*) Twelve economists took part in a survey for overall debts in the 12 months to July, with forecasts ranging from 4.0 to 5.0 percent.
MARKET REACTION
* Norwegian crown was virtually unchanged at 7.9520 against the euro at 0824 GMT, versus 7.9577 before the data.
COMMENTARY
KYRRE AAMDAL, SENIOR ECONOMIST, DNB NOR MARKETS:
'Retail sales were much stronger than expected. We had forecast a decline of 0.3 percent based on a decline in shopping centre activity. But it was plus 1.4 percent.'
'That gives a flying start for the third quarter figures. But we will also need a much stronger increase the rest of the year to reach the central bank's forecast of a 3.5-percent retail sales increase for the year.'
'This will have no effect on the interest rate outlook, with DnB NOR Markets predicting no rate hikes until June 2011.'
KATRINE BOYE, MACROANALYST, NORDEA MARKETS:
'Retail sales were a happy surprise. We have been waiting a long time for this upswing. It was on the upside of the consensus and our estimate. It stabilizes the downward trend in retail trade, but we need several good months of solid growth to reach Norges Bank's estimate.'
'It does not change our view that the next interest rate hike will come in May (2011). It will take more than a month of good growth before we change that.'
'Credit growth was in line with what we were expecting. There was a small uptick in debt growth for businesses. Households are dragging, so there is no reason for Norges Bank to be in a hurry to raise rates.'
BJOERN ROGER WILHELMSEN, ECONOMIST AT FIRST SECURITIES
'These were strong numbers for goods consumption and retail sales, and could be a break in the weak trend from the first half this year'.
'The (consumption) growth was much stronger than expected in July, but it is only a single month...we need confirmation but we think this is a turning point. It confirms the increase we have seen in consumer confidence and also the improvement in the labor market.'
'This is a number that supports Norges Bank's forecast of an interest rate increase at the turn of the year, and we think they will deliver -- our prognosis is January.'
'Credit growth was marginally higher than we expected, so there's nothing particularly new there -- this is also the result of higher economic activity. We think growth in the Norwegian economy is picking up.'
LINKS
Statistics Norway: http://www.ssb.no/english/
Retail sales: http://www.ssb.no/doi_en/
Goods consumption: http://www.ssb.no/vki_en/
Credit growth: http://www.ssb.no/en/k2/
BACKGROUND
* Norway's central bank held its main interest rate steady at 2.0 percent as expected this month, signalling a more uncertain U.S. economic outlook did not change its view that rates would rise around the turn of the year.
* Norway's economy suffered only a mild recession last year amidst the global downturn, with both non-oil GDP and total GDP contracting by 1.5 percent in 2009
* Its economy, however, has struggled since late 2009 -- the non-oil segment grew by just 0.1 percent in the first quarter -- while inflation and wage growth have been moderate, largely taking further hikes off the agenda.
(Reporting by Oslo newsroom, editing by John Stonestreet) Keywords: NORWAY RETAIL/ (Oslo newsroom; +47 22 93 69 77; redaksjonen@reuters.no) COPYRIGHT Copyright Thomson Reuters 2010. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
The crown was little changed versus the euro after the figures, which did little to alter the view interest rates will stay on hold in the months ahead.
**************************************************************
NORWAY RETAIL SALES (PERCENTAGE CHANGE)
Index July vs July 2010
June vs July 2009
Unadjusted value 129.8 n/a 1.5
Unadjusted volume 122.5 n/a 1.3
Seasonally adjusted volume 116.9 1.4 n/a
NOTES - All figures exclude motor vehicles and petrol. A Reuters survey of 11 analysts had found an average expectation of a rise of 0.3 percent in the seasonally adjusted retail sales volume in July from June, with forecasts ranging from minus 1.0 percent to plus 0.6 percent.
NORWAY GOODS CONSUMPTION (PERCENTAGE CHANGE)
Seasonally adjusted 153.6 +0.7 +2.7
NORWAY CREDIT INDICATOR (PERCENTAGE CHANGE)
July 2010 June 2010 Survey*
vs July 2009 vs June 2009 Overall (C2) debts 4.7 4.7 4.8 Households 6.1 6.2 n/a Non-financial corporations 0.6 0.5 n/a
NOTES: (*) Twelve economists took part in a survey for overall debts in the 12 months to July, with forecasts ranging from 4.0 to 5.0 percent.
MARKET REACTION
* Norwegian crown was virtually unchanged at 7.9520 against the euro at 0824 GMT, versus 7.9577 before the data.
COMMENTARY
KYRRE AAMDAL, SENIOR ECONOMIST, DNB NOR MARKETS:
'Retail sales were much stronger than expected. We had forecast a decline of 0.3 percent based on a decline in shopping centre activity. But it was plus 1.4 percent.'
'That gives a flying start for the third quarter figures. But we will also need a much stronger increase the rest of the year to reach the central bank's forecast of a 3.5-percent retail sales increase for the year.'
'This will have no effect on the interest rate outlook, with DnB NOR Markets predicting no rate hikes until June 2011.'
KATRINE BOYE, MACROANALYST, NORDEA MARKETS:
'Retail sales were a happy surprise. We have been waiting a long time for this upswing. It was on the upside of the consensus and our estimate. It stabilizes the downward trend in retail trade, but we need several good months of solid growth to reach Norges Bank's estimate.'
'It does not change our view that the next interest rate hike will come in May (2011). It will take more than a month of good growth before we change that.'
'Credit growth was in line with what we were expecting. There was a small uptick in debt growth for businesses. Households are dragging, so there is no reason for Norges Bank to be in a hurry to raise rates.'
BJOERN ROGER WILHELMSEN, ECONOMIST AT FIRST SECURITIES
'These were strong numbers for goods consumption and retail sales, and could be a break in the weak trend from the first half this year'.
'The (consumption) growth was much stronger than expected in July, but it is only a single month...we need confirmation but we think this is a turning point. It confirms the increase we have seen in consumer confidence and also the improvement in the labor market.'
'This is a number that supports Norges Bank's forecast of an interest rate increase at the turn of the year, and we think they will deliver -- our prognosis is January.'
'Credit growth was marginally higher than we expected, so there's nothing particularly new there -- this is also the result of higher economic activity. We think growth in the Norwegian economy is picking up.'
LINKS
Statistics Norway: http://www.ssb.no/english/
Retail sales: http://www.ssb.no/doi_en/
Goods consumption: http://www.ssb.no/vki_en/
Credit growth: http://www.ssb.no/en/k2/
BACKGROUND
* Norway's central bank held its main interest rate steady at 2.0 percent as expected this month, signalling a more uncertain U.S. economic outlook did not change its view that rates would rise around the turn of the year.
* Norway's economy suffered only a mild recession last year amidst the global downturn, with both non-oil GDP and total GDP contracting by 1.5 percent in 2009
* Its economy, however, has struggled since late 2009 -- the non-oil segment grew by just 0.1 percent in the first quarter -- while inflation and wage growth have been moderate, largely taking further hikes off the agenda.
(Reporting by Oslo newsroom, editing by John Stonestreet) Keywords: NORWAY RETAIL/ (Oslo newsroom; +47 22 93 69 77; redaksjonen@reuters.no) COPYRIGHT Copyright Thomson Reuters 2010. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
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