Market Mover - BNP PARIBAS - Investment Services India

Key Data Preview
Chart 13: Norwegian Mainland GDP
Source: Reuters EcoWin Pro
Q4 (f) Q3 Q2 Q1
Mainland GDP % q/q 0.6 0.5 0.3 -0.9
Mainland GDP % y/y 0.6 -1.4 -2.0 -1.7
Total GDP % q/q 0.7 0.9 -0.9 -0.7
Total GDP % y/y -0.1 -0.7 -2.3 -1.1
Key Point:
Both activity data and surveys indicate that the GDP
continued to expand in Q4.
BNP Paribas Forecast: Further Expansion
Norway: GDP (Q4 2009)
Release Date: Thursday 18 February
In Q3, Norwegian mainland GDP growth at 0.5% q/q was
weaker than market expectations at 0.8%, while total GDP
growth surprised slightly to the upside. The main
contributor to growth was net trade. Oil sector output also
rose, by 2.0% q/q after falling 4.8% in Q2, leading to a
significant increase in total GDP growth.
In Q4, we expect mainland GDP to have continued
expanding on a q/q basis. On the consumer side, retail
sales rose by 0.8% q/q in Q4. Although this is down from
1.2% in Q3, it is still a robust reading. Also, new car
registrations rose for a third quarter in a row, posting a
17.8% q/q increase in Q3. These, together with an
improvement in consumer confidence, point to an increase
in private consumption over the quarter.
Monthly export data show that exports including oil and
natural gas rose further in Q4, but at a slower pace. After a
fall in Q3, imports also ticked higher. Therefore, we expect
both exports and imports to rise, but the contribution from
net trade should decline. Also, the pace of improvement in
manufacturing production eased in Q4, suggesting
continued contraction in investment, but to a lesser extent
than in Q3.
Overall, we expect mainland and total GDP to have
expanded by 0.6% and 0.7 q/q in Q4 respectively.
Chart 14: US: Pressure on Core PPI Eases
Source: Reuters EcoWin Pro
% m/m Jan (f) Dec Nov Oct
Headline 0.8 0.2 1.8 0.3
Ex-food & energy 0.2 0.0 0.5 -0.6
Key Point:
Stronger food and energy prices suggest PPI should
increase by 0.8% m/m in January.
BNP Paribas Forecast: Increase
US: PPI (January)
Release Date: Thursday 18 February
We expect PPI to have increased by 0.8% m/m in January.
Strength should be driven by energy prices which are
forecast to increase by 2.8% m/m, as gasoline prices rose
around 4.5% on the month. Food prices are forecast to
increase by 1.5% m/m in January, reflecting mounting
pressures in commodity food costs. Indeed, while sluggish
demand in 2009 probably delayed the pass-through to
consumer prices last year, higher food prices have now
trickled through the food production pipeline and are
expected to support headline inflation over the next few
months. Core PPI is forecast to increase by 0.2% m/m after
remaining unchanged the previous month. Ongoing
strength in metal prices points to upside risks in auto
prices. In addition, while tight credit conditions and
subdued final demand have so far constrained investment
spending, recent durable goods orders data suggest firms
have increased spending on equipment and software.
Against this background of firmer industrial demand, higher
commodity prices risk being passed on to final goods
prices, pointing to upside risks for producer prices.
Market Economics 12 February 2010
Market Mover
53
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