20 November 2023
The week ahead
- On Tuesday, the Housing and Construction Authority (HMS) releases the housing price index for the capital area.
- On Wednesday, the Monetary Policy Committee (MPC) announces its policy rate decision. We forecast unchanged rates. Alongside the rate decision, the Central Bank of Iceland (CBI) will publish its Monetary Bulletin, containing a new macroeconomic forecast. Iceland Seafood publishes results.
- On Thursday, Hampiðjan and Síldarvinnslan publish their financial statements.
Image of the week
In the most recent survey of market expectations carried out 6-8 November, 27% of respondents considered the monetary policy stance too tight while only 13% considered it too loose. This is the first time since January 2020 that more respondents consider restraint too tight than too loose. In the past 10 surveys, respondents have deemed the stance too loose and, following the publication of the survey results, the MPC has invariably raised the policy rate at its next meeting.
Highlights of the previous week
- The CBI published the results of its market expectations survey. Inflation expectations for the next five years were unchanged at 4.0%, decreasing from 3.6% to 3.5% for the 10-year horizon. The market considers the CBI’s key interest rate to have peaked and expects the MPC to begin a rate-cutting cycle as soon as the second quarter of next year. The change in attitude towards the monetary policy stance is rather marked, as more respondents considered restraint too tight rather than too loose.
- Price measurements for the Consumer Price Index were carried out in the week. We forecast 8.0% inflation in November. We expect inflation to hold fairly steady in December before dwindling somewhat in the new year, to 7.3% in January and 6.7% in February. The CPI rose sharply between months in January and February of this year and inflation can be expected to decrease when these measurements disappear from annual inflation.
- Statistics Iceland published a macroeconomic forecast.
- On the stock market, Amaroq, Brim, Eik, Reitir and Reginn published results. Trading in shares in Kaldalón began on the Main Market of Nasdaq Iceland.
- On the bond market, Government Debt Management auctioned treasury notes, Kvika Bank issued securities in SEK and NOK and Íl-sjóður announced preparations to offer switches of HFF bonds for bonds owned by ÍL-sjóður.
Statistics and market data
Weekly bulletin 20 November 2023 (PDF) (in Icelandic)
Disclaimer
This review and/or summary is marketing material intended for information purposes and does not constitute financial advice or an independent financial 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. The review is based on publicly available information from parties that Landsbankinn deems reliable yet the Bank cannot independently guarantee the accuracy of the information. Landsbankinn is not liable for any loss that may result from use of the information contained herein.Information about the past performance of financial instruments or indices show nominal returns, unless otherwise mentioned. 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. Detailed information about the historic performance of financial instruments and indices is available on Landsbankinn’s website, including on returns for the past 5 years.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 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 (www.fme.is).You may also be interested in
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22 April 2024
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