NORWAY: LFS Survey Signals Steady Labour Market Conditions
The Norwegian seasonally adjusted LFS unemployment rate was 3.9% in January, down a touch from 4.0% in December. The LFS rate has fluctuated between 3.9 and 4.0% for the last seven months, after reaching a high of 4.2% in June 2024. As such, labour market conditions implied by the LFS remain steady on an aggregate basis. Norges Bank remain on track to deliver a 25bp cut on March 27.
- The LFS unemployment rate Sahm rule (the difference between the current 3mma of the unemployment rate and its minimum value over the last twelve months) has fallen to zero from a high of 0.7pp in the middle of last year.
- Employment growth was 1.3% M/M, fully unwinding December’s 1.2% fall, bringing the employment rate back to 70%.
- Preliminary renumeration data points to a 6.0% Y/Y increase, but this is a very volatile series (light green line on the bottom chart) so should not be read into much. Focus remains on the outcome of this year’s union wage negotiations next month.
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NORWAY: Goods Consumption Should Contribute Positively To Q4 GDP
Norwegian SA retail sales excluding motor vehicles fell 0.1% in December, while November’s reading was revised up a tenth to 0.4%. On a 3m/3m basis, sales grew 0.5% for the second consecutive month, and rose 0.7% Y/Y (vs 0.2% prior). Similar dynamics were observed in retail sales excluding motor vehicles and fuel (1.0% 3m/3m vs 1.3% prior; 3.0% Y/Y vs 0.9% prior).
- Statistics Norway notes that pharmacies, grocery stores and stores selling beverages saw lower retail sales in December, but this was offset by increases in online shopping (for Christmas in particular).
- Overall, retail trade looks to have outperformed the -0.3% Q/Q expectation from contacts in the Q4 Regional Network Survey.
- The household goods consumption index – which feeds into the quarterly GDP calculation – fell 1.1% M/M in December but rose 1.0% on a 3m/3m basis (vs 0.5% prior).
BTP TECHS: (H5) Resistance Holds For Now
- RES 4: 122.85 High Dec 11
- RES 3: 120.98 61.8% retracement of the Dec 11 - Jan 13 bear leg
- RES 2: 120.45 High Jan 2
- RES 1: 119.78 50-day EMA
- PRICE: 119.07 @ Close Jan 28
- SUP 1: 118.27/117.16 Low Jan 16 / 13 and the bear trigger
- SUP 2: 116.59 76.4% retrace of the Jun - Dec ‘24 bull cycle (cont)
- SUP 3: 116.07 Low Jul 8 ‘24 (cont)
- SUP 4: 115.45 Low Jul 3 ‘24 (cont)
The latest rally in BTP futures highlights a corrective phase. The 20-day EMA has been breached and this exposes the next firm resistance at 119.78, the 50-day EMA. Clearance of the 50-day average would strengthen a bullish condition. The medium-term trend condition remains bearish and the pullback from last Wednesday’s high may be an early reversal signal. The bear trigger has been defined at 117.16, the Jan 13 low.
