norges bank 11 executive board meeting 13 august 2008

Norges Bank

11

Executive Board meeting13 August 2008

Norges Bank

22

-2.5

0

2.5

5

2002 2003 2004 2005 2006 2007 2008

-2.5

0

2.5

5

Sources: Statistics Norway and Norges Bank

Weighted median

CPI-ATE1)

20 per cent trimmed mean

CPI

Consumer prices12-month change. Per cent. January 2002 – July 2008

CPIXE2)

1) CPI adjusted for tax changes and excluding energy products.2) CPIXE: CPI adjusted for tax changes and excluding temporary changes in energy prices

Norges Bank

3

0

1

2

3

4

5

6

7

Jan-07 Jan-08 Jan-09 Jan-10

0

1

2

3

4

5

6

7

Sources: Thomson Reuters and Norges Bank

Central bank interest rates and forward rates

Norway

US

Euro area

11 August 2008

Market after MPR 2/08 (25 June)

Sweden

UK

Norges Bank

4

Money market rates

4

4.5

5

5.5

6

6.5

7

Oct-08 Jan-09 Apr-09 Jul-09 Oct-09 Jan-10 Apr-10 Jul-10 Oct-10

4

4.5

5

5.5

6

6.5

7

Market 11 August 2008

Market after MPR 2/08 (25 June)

MPR 2/08

Sources: Thomson Reuters and Norges Bank

Norges Bank

5Source: Bloomberg

0

50

100

150

200

250

300

350

2007 2007 2008 2008 2008

0

50

100

150

200

250

300

350

JPMorgan ChaseiTraxx Europe index

Citigroup

UBS

Merrill Lynch

CDS prices for US and European companies and selected banks.

Basis points. 1 July 2007 – 11 August 2008

Norges Bank

6

60

70

80

90

100

110

120

130

Jul-07 Oct-07 Jan-08 Apr-08 Jul-08

60

70

80

90

100

110

120

130

Equities Indices. 1 July 2007 = 100

Source: Thomson Reuters

US, S&P 500

Emerging markets

Norway, OSEBX

Europe, Stoxx

Japan, Topix

25 June

Norges Bank

7

0.0

0.2

0.4

0.6

0.8

1.0

1.2

1.4

Jul-07 Nov-07 Mar-08 Jul-08 Nov-08 Mar-09 Jul-09

0.0

0.2

0.4

0.6

0.8

1.0

1.2

1.4

Difference between three-month money market rates and expected key rates 1)

Historic and ahead. Percentage points.

US

Euro area

UK

Norway

1) The expected key rate is measured by the Overnight Indexed Swap (OIS). For Norway, the estimates are based on key policy rate expectations in the market.

Sources: Bloomberg, Thomson Reuters and Norges Bank

Norges Bank

8

OECD leading indicatorsIndex. Historic average = 100. January 1995 – June 2008

92

94

96

98

100

102

104

106

108

1995 1997 1999 2001 2003 2005 2007

92

94

96

98

100

102

104

106

108

Sources: Thomson Reuters / OECD

Euro area

OECD

Norges Bank

9

50

150

250

350

2002 2004 2006 2008

50

150

250

350

0

20

40

60

80

100

120

140

160

2002 2004 2006 2008 2010

0

20

40

60

80

100

120

140

160

Oil price (Brent Blend) in USD per barrel

Futures prices (broken lines)

1) In USD Sources: Thomson Reuters, Statistics Norway and Norges Bank

20.06.08 (MPR 1/08)

International commodity prices1)

Index. Week 1 2002 = 100 Week 1 2002 – week 32 2008

11.08.08

Food

IndustrialsAll items

Metals

Non-foodagriculturals

Norges Bank

10

Rise in consumer prices abroad12-month change. Per cent. January 2002 – July 2008

-5

0

5

10

15

20


-5

0

5

10

15

20

UK

Euro area

US

Japan

Sweden


-5

0

5

10

15

20


-5

0

5

10

15

20Russia

Brazil

India1)

China

1) Wholesale prices

Norges Bank

11

0

1

2

3

4

5

6

2005 2006 2007 2008

0

1

2

3

4

5

6

US

Inflation and long-term inflation expectationsMonthly figures. Per cent. January 2005 – July 2008 1)

CPI

CPI excl food and energy

10-year inflation expectations: swaps

10-year inflation expectations: ”break-even” (Real interest rate bonds)

5-10-year inflation expectations: Survey (University of Michigan)

Sources: Bloomberg and Thomson Reuters1) CPI for January 2005 – June 2008

Norges Bank

12

0

1

2

3

4

5

6

2005 2006 2007 2008

0

1

2

3

4

5

6

USInflation and implicit inflation expectations 1)

Monthly figures. Per cent. January 2005 – July 2008 2)

CPI


Implicit five-year inflation expectations in five years

Implicit one-year inflation expectations in one year

Sources: Bloomberg and Thomson Reuters

1) Implicit one-year (five-year) inflation expectations in one year (five years) can be interpreted as expected one-year (five-year) inflationin one year (five years). Inflation expectations are based on inflation swaps from Bloomberg. 2) CPI for January 2005 – June 2008

Norges Bank

13

0

1

2

3

4

5

6

2005 2006 2007 2008

0

1

2

3

4

5

6

Euro area Inflation and implicit inflation expectations1)

Monthly figures. Per cent. January 2005 – July 2008 2)

CPI


Implicit one-year inflation expectations in one year

Implicit five-year inflation expectations in five years


1) Implicit one-year (five-year) inflation expectations in one year (five years) can be interpreted as expected one-year (five-year) inflationin one year (five years). Inflation expectations are based on inflation swaps from Bloomberg. 2) CPI for January 2005 – June 2008

Norges Bank

14

0

1

2

3

4

5

6

Jan-08 Feb-08 Mar-08 Apr-08 May-08 Jun-08 Jul-08 Aug-08

0

1

2

3

4

5

6

US 2- and 10-year inflation expectations

Per cent. Daily figures. 2 January 2008 – 8 August 2008

2-year inflation expectations10-year inflation expectations


Norges Bank

15

-20

-15

-10

-5

0

5

10

15

20

25

1970 1975 1980 1985 1990 1995 2000 2005

-20

-15

-10

-5

0

5

10

15

20

25

Mean January – June 20081)

Relative consumer prices

Relative wage costs

Real exchange rateDeviation from mean. Per cent. 1970 – 2007

Average ”oil age”

1) Data for 2008 based on observations to 8 August Sources: Statistics Norway, Technical Reporting Committee on Income Settlements, Ministry of Finance and Norges Bank

Norges Bank

16

Import and export prices 4-quarter change. Per cent. 2000 Q1 – 2008 Q2

-12

-8

-4

0

4

8

12

16

20

2000 2001 2002 2003 2004 2005 2006 2007 2008

-12

-8

-4

0

4

8

12

16

20

Traditional imports

Traditional exports

Source: Statistics Norway

Norges Bank

17

90

100

110

120

130

140

150


90

100

110

120

130

140

150


90

100

110

120

130

140

150


90

100

110

120

130

140

150

Manufacturing production indexSeasonally adjusted volume index. 3-month moving average.

January 2002 – June 2008

Capital goods

Intermediate goods

Consumer goods

Trend

3-month moving average

Norges Bank

18

Bottle-necks in productionBusiness tendency survey. Per cent. 2004 Q4 – 2008 Q2

40

45

50

55

60

65

70

2004 Q4 2005 Q4 2006 Q4 2007 Q4

0

5

10

15

20

25

30

Labour supply(right-hand scale)

Demand and competition (left-hand scale)


Norges Bank

19

2380

2400

2420

2440

2460

2480

2500

2520

2540

Dec-06 Mar-07 Jun-07 Sep-07 Dec-07 Mar-08 Jun-08

2380

2400

2420

2440

2460

2480

2500

2520

2540

Employment (LFS)In 1000s of persons. Seasonally adjusted. June 2006 – May 2008


Norges Bank

20

-20

-10

0

10

20

30

40

1998 2000 2002 2004 2006 2008

-20

-10

0

10

20

30

40

Annualised change in 3-month moving average

House pricesMonthly figures. January 1998 – July 2008

12-month change

Sources: Norwegian Association of Real Estate Agents, Association of Real Estate Agency Firms, ECON Pöyry and FINN.no

Norges Bank

21

0

100

200

300

400

500

600

700

800

900

2002 2003 2004 2005 2006 2007 2008

0

100

200

300

400

500

600

700

800

900

Building starts Area (1000 m2). Trend. January 2002 – May 2008

Other buildings

Dwellings


Norges Bank

22

130

140

150

160

170

2005 2006 2007 2008

130

140

150

160

170

Sources: Statistics Norway

Published in April

Published in May

Index of commodity consumption Volume. Seasonally adjusted. January 2005 – May 2009

Norges Bank

23

Household net lendingTotal past four quarters. In billions of NOK. 2003 Q1 – 2008 Q1

-100

-80

-60

-40

-20

0

20

40

60

2003 2004 2005 2006 2007 2008

-100

-80

-60

-40

-20

0

20

40

60

National accounts

Financial sector accounts (FINSE)

National accounts, excludingreinvested dividends


Norges Bank

24

3.75

4.25

4.75

5.25

5.75

6.25

6.75

7.25

May-07 Jul-07 Sep-07 Nov-07 Jan-08 Mar-08 May-08 Jul-08

3.75

4.25

4.75

5.25

5.75

6.25

6.75

7.25

Mortgage rate2)

Money market rate

Key policy rate, money market rate1) and bank lending rate on new loans2)

In per cent. 3 May 2007 – 11 August 2008

Sources: Norsk familieøkonomi AS and Norges Bank

1) 3-month NIBOR.2) Interest rates on new mortgage loans of NOK 1 million within 60% ofpurchase price with floating interest rate. Figures for the 20 largest banks, weighted according to market share.

Key policy rate

Norges Bank

2525

Key policy rate

Source: Norges Bank

0

1

2

3

4

5

6

7

8

9

2005 2006 2007 2008 2009 2010 2011

0

1

2

3

4

5

6

7

8

9

Strategy interval

1/053/04

2/053/05 1/06

2/063/06

2/071/07

3/07MPR 2/081/08

2/08

norges bank 11 executive board meeting 13 august 2008

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