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Charts Monetary Policy Report 1/2008

Charts Monetary Policy Report 1/2008. 1 Monetary policy assessments and strategy. Chart 1.1 Consumer prices. 12-month change. Per cent. Monthly figures. Jan 04 – Feb 08. CPI. Weighted median. CPI-ATE 1). 20 per cent trimmed mean.

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Charts Monetary Policy Report 1/2008

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  1. Charts Monetary Policy Report 1/2008

  2. 1 Monetary policy assessments and strategy

  3. Chart 1.1 Consumer prices. 12-month change. Per cent. Monthly figures. Jan 04 – Feb 08 CPI Weighted median CPI-ATE1) 20 per cent trimmed mean 1) CPI adjusted for tax changes and excluding energy products. Source: Statistics Norway

  4. Chart 1.2 CPI-ATE.1) Total and by supplier sector.2) 12-month change. Per cent. Monthly figures. Jan 04 – Feb 08 Domestically produced goods and services CPI-ATE Imported consumer goods 1) CPI-ATE: CPI adjusted for tax changes and excluding energy products. 2) Norges Bank's estimates. Sources: Statistics Norway and Norges Bank

  5. Chart 1.3 Registered unemployed1) and number of unfilled vacancies2). Monthly figures. Jan 80 – Feb 08 Registered unemployed (left-hand scale) Number of unfilled vacancies (right-hand scale) 1) As a percentage of the labour force. Seasonally adjusted. 2) In thousands. Trend-adjusted. Source: Norwegian Labour and Welfare Administration (NAV)

  6. Chart 1.4 Policy rates and estimated forward rates on 25 October 2007 and 10 March 2008.1) Per cent. Daily and quarterly figures. 2 Jan 06 – 31 Dec 11 UK US Euro area 1) Dotted lines show forward rates on 25 October 2007. Broken lines show forward rates at 10 March 2008. Forward rates are based on money market rates and interest rate swaps. Sources: Reuters (EcoWin) and Norges Bank

  7. Chart 1.5 Expected consumer price inflation 2 and 5 years ahead.1) Per cent. Quarterly figures. 02 Q2 – 08 Q1 Expected inflation 5 years ahead Expected inflation 2 years ahead 1) Average of expectations of employer/employee organisations and experts (financial industry employees, macroanalysts and academics) Source: TNS Gallup

  8. Chart 1.6 3-month real interest rate1), 10-year real interest rate2) and the normal real interest rate in Norway3). Per cent. Quarterly figures. 96 Q1 – 07 Q4 10-year real interest rate Interval for normal real interest rate 3-month real interest rate 1) 3-month money market rate deflated by the 12-quarter moving average (centred) of inflation measured by the CPI. Projections for the CPI from this Report form the basis for this estimate. 2) 10-year swap rate deflated by the inflation target. 3) Calculations may indicate that the normal real interest rate for Norway is currently in the lower end of the interval 2½ - 3½%. Sources: Statistics Norway and Norges Bank

  9. 30% 50% 70% 90% Chart 1.7a Projected key policy rate in the baseline scenario with fan chart. Per cent. Quarterly figures. 06 Q1 – 11 Q4 Source: Norges Bank

  10. 30% 50% 70% 90% Chart 1.7b Estimated output gap in the baseline scenario with fan chart. Per cent. Quarterly figures. 06 Q1 – 11 Q4 Sources: Statistics Norway and Norges Bank

  11. 30% 50% 70% 90% Chart 1.7c Projected CPI in the baseline scenario with fan chart. 4-quarter change. Per cent. Quarterly figures. 06 Q1 – 11 Q4 Sources: Statistics Norway and Norges Bank

  12. 30% 50% 70% 90% Chart 1.7d Projected CPI-ATE1) in the baseline scenario with fan chart. 4-quarter change. Per cent. Quarterly figures. 06 Q1 – 11 Q4 1) CPI-ATE: CPI adjusted for tax changes and excluding energy products. Sources: Statistics Norway and Norges Bank

  13. Chart 1.8 Key policy rate in the baseline scenario in MPR 2/07, MPR 3/07 and MPR 1/08. Per cent. Quarterly figures. 06 Q1 – 11 Q4 MPR 2/07 MPR 3/07 MPR 1/08 Source: Norges Bank

  14. Chart 1.9 Projected inflation and output gap in the baseline scenario. Per cent. Quarterly figures. 06 Q1 – 11 Q4 Output gap (left-hand scale) CPI (right-hand scale) CPI-ATE (right-hand scale) Sources: Statistics Norway and Norges Bank

  15. Chart 1.10 Key policy rate in the baseline scenario and estimated forward rates1). Per cent. Quarterly figures. 06 Q1 – 11 Q4 Key policy rate in the baseline scenario Forward rates 1) A credit risk premium and a technical difference of 0.20 percentage point have been deducted when calculating the forward rates at 10 March to ensure comparability with the key policy rate. Source: Norges Bank

  16. Chart 1.11 Projected differential between key rates in Norway and trading partners in MPR 3/07 and MPR 1/08.1) Per cent. Quarterly figures. 07 Q3 – 11 Q4 MPR 1/08 MPR 3/07 1) Differential between key policy rate in baseline scenario and weighted average of trading partners' forward rates on 10 March Source: Norges Bank

  17. Chart 1.12 Import-weighted exchange rate (I-44) in the baseline scenario in MPR 3/07 and MPR 1/08.1) Index. Quarterly figures. 06 Q1 – 11 Q4 MPR 3/07 MPR 1/08 1) A rising curve denotes a weaker krone exchange rate. The exchange rate path is based on uncovered interest rate parity. Source: Norges Bank

  18. 30% 50% 70% 90% Chart 1.13a Key policy rate in the baseline scenario and in the alternatives with higher and lower inflation. Per cent. Quarterly figures. 06 Q1 –11 Q4 Higher inflation Lower inflation Source: Norges Bank

  19. 30% 50% 70% 90% Chart 1.13b The output gap in the baseline scenario and in the alternatives with higher and lower inflation. Per cent. Quarterly figures. 06 Q1 – 11 Q4 Lower inflation Higher inflation Sources: Statistics Norway and Norges Bank

  20. 30% 50% 70% 90% Chart 1.13c CPI-ATE in the baseline scenario and in the alternatives with higher and lower inflation. 4-quarter change. Per cent. Quarterly figures. 06 Q1 – 11 Q4 Higher inflation Lower inflation 1) CPI-ATE: CPI adjusted for tax changes and excluding energy products. Sources: Statistics Norway and Norges Bank

  21. Chart 1.14 Key policy rate, Taylor rule, growth rule and rule with external interest rates. Per cent. Quarterly figures. 06 Q1 – 08 Q1 Key policy rate (red line) Taylor rule (blue line) Growth rule (yellow line) Rule with external interest rates (green line) Sources: Statistics Norway and Norges Bank

  22. Chart 1.15 Key policy rate and interest rate developments that follow from Norges Bank's average pattern of interest rate setting.1) Per cent. Quarterly figures. 00 Q1 – 08 Q1 Interest rate movements that follow from Norges Bank's average pattern with a 90% confidence interval (grey area) Key policy rate (red line) 1) Interest rate movements are explained by developments in inflation, mainland GDP growth, wage growth and 3-month interest rates among trading partners. See Inflation Report 3/04 for further discussion. Source: Norges Bank

  23. Chart 1.16 Differential between long-term forward interest rates in Norway and the euro area.1) Percentage points. Daily figures. 1 Dec 99 – 10 Mar 08 1) 5-year forward rates 5 years ahead Sources: Reuters (EcoWin) and Norges Bank

  24. Chart 1 Interval for the key policy rate at the end of each strategy period and actual developments.1) Per cent. Daily figures. 2 Jan 04 – 13 Mar 08 3/07 2/07 1/07 3/06 2/06 Strategy period 1/06 3/05 3/03 2/05 1/05 1/04 3/04 2/04 Key policy rate 1) The Executive Board's decision of 13 March is not shown in the chart (see table p. 68) Source: Norges Bank

  25. 2 The global economy, financial markets and commodity markets

  26. Chart 2.1 Developments in equity markets. Index, 1 Jan 07 = 100. Daily figures. 1 Jan 07 – 10 Mar 08 Emerging economies Euro area Oslo Stock Exchange Japan US Source: Reuters (EcoWin)

  27. Chart 2.2 Expected real interest rate1) one year ahead in the US and the euro area. 10-day moving average. Per cent. 1 Jan 07 – 10 Mar 08 Euro area US 1) One-year maturity. The real interest rate is derived from nominal swap rates and inflation swaps. Sources: Bloomberg, Reuters (EcoWin) and Norges Bank

  28. Chart 2.3 Difference between 3-month money market rate and expected key policy rate1). Percentage points. Daily figures. Historical (from 1 Jun 07) and forward (at 10 Mar 08) UK Euro area US Norway 2) 1) The expected key rate is represented by the Overnight Indexed Swap (OIS). 2) Norges Bank's estimates. Sources: Bloomberg, Reuters and Norges Bank

  29. Chart 2.4 Spread between money-market rates with different maturities and expected key policy rate1). Average for the US, the euro area and the UK. Percentage points. Daily figures. 1 Jan 07 – 10 Mar 08 3-month 12-month 1-month 1) The expected key rate is represented by the Overnight Indexed Swap (OIS). Sources: Bloomberg and Norges Bank

  30. Chart 2.5 CDS prices for US and European companies and selected banks. Basis points. Daily figures. 1 Jan 07 – 10 Mar 08 Merrill Lynch Citigroup US CDX 1) Europe Itraxx1) 1) CDS prices for investment grade companies. Source: Bloomberg

  31. Chart 2.6 Survey on bank lending practices. US. Share of banks that have tightened their credit standards. Per cent. Quarterly figures. 03 Q1 – 08 Q1 For commercial buildings For household mortgages 1) For large and medium-sized enterprises 1) Up to and including 2007 Q1, the figures apply to all household mortgages. Thereafter the figures apply to prime mortgages. Source: Reuters (EcoWin)

  32. Chart 2.7 Survey on bank lending practices. Euro area. Share of banks that will tighten their credit standards. Per cent. Quarterly figures. 03 Q1 – 08 Q1 For enterprises For household mortgages Source: Reuters (EcoWin)

  33. Chart 2.8 Credit spreads on bonds with 10-year maturities. Percentage points. Daily figures. 1 Jan 04 – 10 Mar 08 US High Yield Emerging economies US BBB Europe BBB Source: Reuters (EcoWin)

  34. Chart 2.9 Global Risk Index (GRI). Per cent. Daily figures. 1 Jan 07 – 10 Mar 08 Sources: Reuters (EcoWin) and Norges Bank

  35. Chart 2.10 Change in effective exchange rates since MPR 3/071) 1) A positive (negative) figure denotes a stronger (weaker) exchange rate. Sources: Bloomberg and Norges Bank

  36. Chart 2.11 I-44 and foreign financial participants’ net purchases of NOK (in billions of NOK). Weekly figures. Week 41 2005 – Week 10 2008 Net purchases of NOK 1) (NOK bn) (right-hand scale) I-44 (left-hand scale) 2) 1) Relative to a trend calculated using a Hodrick-Prescott filter. See Staff Memo 2005/2 (www.norges-bank.no) for further details. 2)A rising curve denotes a stronger krone exchange rate. Sources: Statistics Norway and Norges Bank

  37. Chart 2.12 Oil price (Brent Blend) in USD, EUR, NOK and SDR. Monthly figures. Jan 00 – Feb 08 USD (left-hand scale) NOK (right-hand scale) EUR (left-hand scale) SDR (left-hand scale) Source: Reuters (EcoWin)

  38. Chart 2.13 Difference between annual change in world oil demand and supply from non-OPEC countries. In million barrels per day. Annual figures. 2000 – 2007 Sources: International Energy Agency (IEA) and Norges Bank

  39. Chart 2.14 Non-commercial participants' net positions in the oil futures market. Weekly figures. Week 1 2004 – Week 10 2008 Number of contracts USD per barrel Net long positions Oil price (WTI, right-hand scale) Net short positions Sources: Reuters (EcoWin) and Commodity Futures Trading Commission (CFTC)

  40. Chart 2.15 Oil price (Brent Blend) in USD per barrel. Daily figures. 1 Jan 04 – 10 Mar 08. Futures prices. 25 Oct 07 and 10 Mar 07 (broken lines). Monthly figures. Dec 07 – Sep 10 10 Mar 08 25 Oct 07, MPR 3/07 Sources: Reuters (EcoWin) and Norges Bank

  41. Chart 2.16 Average prices for crude oil and natural gas. Quarterly figures. 00 Q1 – 08 Q11) USD per barrel USD per 1000 Sm3 Oil price Brent Blend (right-hand scale) Russian gas2) (left-hand scale) Average gas price StatoilHydro (left-hand scale) Gas price UK (left-hand scale) 1)For 2008 Q1 the average of daily figures 1 Jan 08 to 10 Mar 08 is used. For Russian gas the monthly figures for January are used for 08 Q1. 2) Price at German border. Sources: Statistics Norway, Reuters (EcoWin), StatoilHydro and Norges Bank

  42. Chart 2.17 Oil price (Brent Blend) and average export price for Norwegian natural gas1). The oil price has been moved back 2 quarters. 81 Q1 – 07 Q4 NOK per Sm3 NOK per barrel Gas price (left-hand scale) Oil price Brent Blend (right-hand scale) 1) Gas prices from 81 Q1 to 07 Q1 were obtained from SN. Gas prices from 2007 Q2 - Q4 were obtained from StatoilHydro's quarterly accounts. Sources: Statistics Norway, Reuters (EcoWin), StatoilHydro and Norges Bank

  43. Chart 2.18 International commodity prices in USD. Index, 2000 = 100. Weekly figures. Week 1 2000 – Week 10 2008 Metals Industrials All items Food Non-food agriculturals Sources: Reuters (EcoWin) and The Economist

  44. Chart 2.19 Metal prices in USD. Index, 4 Jan 00 = 100. Daily figures. 4 Jan 00 – 10 Mar 08. Futures prices from 10 Mar 08 (broken lines). Monthly figures. Apr 08 – Jun 10 Copper Nickel Aluminium Zinc Sources: Reuters (EcoWin) and Norges Bank

  45. Chart 2.20 Freight rate index for dry bulk. Baltic Dry Index. 1 Jan 1985 = 1000. Daily figures. 4 Jan 00 – 10 Mar 08 Source: Reuters (EcoWin)

  46. Chart 2.21 House prices in the US and Europe. 4-quarter change. Per cent. Quarterly figures. 00 Q1 – 07 Q4 Spain Denmark UK Ireland US Source: Reuters (EcoWin)

  47. Chart 2.22 GDP in industrial countries. 4-quarter change. Per cent. Quarterly figures. 01 Q1 – 07 Q4 US UK Euro area Japan Source: Reuters (EcoWin)

  48. Chart 2.23 GDP in BRIC countries1). 4-quarter change. Per cent. Quarterly figures. 01 Q1 – 07 Q4 China India2) Russia Brazil 1) Brazil, Russia, India and China. 2) Measured by factor price. Source: Reuters (EcoWin)

  49. Chart 2.24 Consumer prices in industrial countries. 12-month change. Per cent. Monthly figures. Jan 02 – Feb 08 US Euro area UK Japan Source: Reuters (EcoWin)

  50. Chart 2.25 Consumer prices in BRIC countries1). 12-month change. Per cent. Monthly figures. Jan 02 – Jan 08 Russia Brazil India China 1) Brazil, Russia, India and China. Source: Reuters (EcoWin)

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