18 June 2024
The week ahead
- HMS publishes the housing price index later today.
- On Wednesday, inflation figures will be published for the UK.
- On Thursday, the Bank of England announces its policy rate decision.
Image of the week
Unemployment figures as registered with the Directorate of Labour are up between years across almost all sectors. Relatively speaking, unemployment has increased most in accommodation service and construction. Registered overnight stays have declined slightly, possibly accounting for the increase in unemployment in that sector. It is harder to gauge the outlook in construction, as there is conflicting data about activity in that sector. According to national accounts, investment in residential housing grew by just under 16% between years in the first quarter of this year while HMS reports that the number of apartments under construction has declined continuously all last year.
Highlights of the previous week
- Around 155,000 foreign visitors travelled through Keflavík International Airport in May. Departures are down by 2.3% compared to May 2023. This is the second month in a row where foreign visitor numbers decline between years, though the 3.5% drop in April is likely due to the timing of Easter this year. Despite the contraction in recent months, the number of foreign travellers visiting Iceland this year to date is up by 3.9% compared to the previous year.
- Unemployment measured 3.4% in May, down by 3.6% from April, true to the usual trend of decreasing as summer approaches. Unemployment was 3.0% in May 2023 and has in recent months hovered 0.3-0.4 percentage points above the previous years’ figures. On average, 6,041 persons were unemployed in Iceland in May.
- Domestic household payment card turnover increased by 4.3% between years in May, at fixed prices. In recent months, payment card turnover has almost always contracted between years - this increase is the highest since January 2023. Increased turnover figures are interesting in light of persistently high interest rates and a contraction in the economy in the first quarter.
- Price measurements for the June Consumer Price Index were carried out last week. We expect the CPI to increase by 0.47% between months in June and inflation to fall from 6.2% to 5.8%.
- Inflation in the US measured 3.3% in May, receding by a mere 0.1 percentage points between months. The Federal Reserve kept its policy rate unchanged, in line with expectations.
- Reitir, Orkuveita Reykjavíkur, Arion Bank and Landsbankinn auctioned bonds. Government Debt Management auctioned Treasury bills.
Statistics and market data
Disclaimer
This review and/or summary is marketing material intended for information purposes and not for business purposes. This marketing material does not contain investment advice or independent investment analysis. The legal provisions that apply to financial advice and financial analysis do not apply to this content, including the ban on transactions prior to publication.Information about the prices of domestic shares, bonds and/or indices is source from Nasdaq Iceland - the Stock Exchange. Landsbankinn’s website contains further information under each individual equity, bond class or index. Information about the prices of non-domestic financial instruments, indices and/or funds are sourced from parties Landsbankinn considers reliable. Past returns are not an indication of future returns.Information about the past returns of Landsbréf funds is based on information from Landsbréf. Detailed information about the historic performance of individual funds is available on Landsbankinn’s website, including on returns for the past 5 years. Information about the past performance of funds show nominal returns, unless otherwise stated. If results are based on foreign currencies, returns may increase or decrease as a result of currency fluctuations. Past returns are not necessarily an indication of future returns.Securities transactions involve risk and readers are encouraged to familiarise themselves with the Risk Description for Trading in Financial Instruments and Landsbankinn’s Conflict of Interest Policy, available on Landsbankinn’s website. Landsbankinn is licensed to operate as a commercial bank in accordance with Act No. 161/2002, on Financial Undertakings, and is subject to supervision by the Financial Supervisory Authority of the Central Bank of Iceland (https://www.cb.is/financial-supervision/)You may also be interested in
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14 Oct. 2024
Tomorrow morning, Landsbankinn Economic Research presents a new economic forecast to the year 2027 at a morning meeting in Harpa. This week, the Housing and Construction Authority (HMS) publishes the housing price index, the rental price index and its monthly housing market report. On Wednesday, the Central Bank of Iceland (CBI) releases the minutes of the Monetary Policy Committee’s last meeting. Last week’s highlight was that traveller numbers to Iceland are slightly up between years in September and there is a small uptick in unemployment.
7 Oct. 2024
The Monetary Policy Committee (MPC) of the Central Bank of Iceland (CBI) lowered the policy rate last week, for the first time in four years. The CBI’s key interest rate is now 9% after having stood unchanged at 9.25% for over a year. Inflation in the eurozone remains on a downward trajectory, measuring 1.8% in September, below the 2% inflation target. Inflation figures for the US will be published this week.
30 Sept. 2024
Inflation was slightly lower than expected in September, down from 6.0% to 5.4%. We nevertheless expect that the Monetary Policy Committee (MPC) will wish to proceed with caution when it meets early this week and that it will keep the policy rate unchanged on Wednesday.
23 Sept. 2024
This week, the Central Bank of Iceland (CBI) releases a statement from the Financial Stability Committee and a report on financial stability. Statistics Iceland publishes inflation figures for September on Friday. Last week, the Housing and Construction Authority (HMS) published the housing price index, which rose sharply between months, and the rental price index, which was down between months. Data on payment card turnover, published by the CBI last week, indicates that there is still considerable domestic demand for goods and services.
16 Sept. 2024
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9 Sept. 2024
This week’s highlights are the publication of August tourist figures and registered unemployment, both set for release tomorrow. Last week, the minutes of the last rate decision meeting of the Monetary Policy Committee (MPC) were published. The MPC was unanimous in its decision to keep the policy rate unchanged, unlike the previous three meetings, at which one Committee member voted to lower rates by 0.25 percentage points.
2 Sept. 2024
Inflation decreased unexpectedly between months in August. The economy contracted slightly between months in the second quarter. At the same time, it has become clear that GDP growth was higher in 2023 than previously thought, and that the contraction was less pronounced in the first quarter. This week, the Central Bank of Iceland (CBI) publishes the balance of payment and the minutes of the last meeting of the Monetary Policy Committee (MPC).
26 August 2024
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