Norway inflation eases but don't expect rate cuts
May 10 (Reuters) -Norwegian April inflation numbers are softer then the Norges Bank expected but there remains a wide margin over the central bank's 2.0% target and, as such, rate cuts are unlikely this year.
Core CPI at 4.4% year-on-year is below the Norges Bank's 4.5% estimate but above the Reuters consensus forecast of 4.3%. Headline CPI rose 3.6% on the year versus 3.9% in March and a 3.5% Reuters poll call. The Norges Bank had forecast a 3.9% return.
Norwegian inflation is running softer than central bank expectations, but rate cuts will be off the table while the NOK remains weak, wage growth is rising and broader economic growth gains traction.
For the crown, a recovery versus the euro could be underway but it remains weak in a longer-term context. The EUR has appreciated over 60% versus the NOK since 2012 and nearly 7% so far this year.
This week's EUR/NOK price action has favoured the crown, and a long upper candle shadow highlights the weakness in the cross. A breach of weekly Ichimoku cloud top support at 11.6325 and a low of 11.6200 recorded.
The crown is off its lows and inflation is falling but don't expect any rate cuts this year.
For more click on FXBUZ
EUR/NOK daily candle chart: https://tmsnrt.rs/3JXsPte
Norway April core CPI: https://tmsnrt.rs/4b928Os
(Peter Stoneham is a Reuters market analyst. The views expressed are his own)
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