Weekly bulletin 23 September 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.

23 September 2024

The week ahead

On Wednesday, the CBI releases a statement from the Financial Stability Committee and the latter financial stability report of the year.
On Friday, Statistics Iceland publishes inflation figures for September and the CBI its quarterly Hagvísar.

Image of the week

Last week, the US Federal Reserve cut the policy rate by 0.5 percentage points (pp). As a general rule, the Fed changes rates in 0.25 pp increments and the previous 0.5 pp change occurred in 2008, in the midst of an international financial crisis. A growing number of central banks are initiating rate-cut cycles, such as the central banks of Europe, Sweden, Switzerland and the Bank of England. The Central Bank of Norway has not joined in, any more than the CBI. Japan is an exception, raising rates in early August.

Highlights of the previous week

HMS published the housing price index, the rental price index and its monthly report. The housing price index rose by 1.4% between months in August, the seventh month in a row. Despite this month-over-month increase, the 12-month change is down from 11.0% to 10.8%. Single-family dwellings in the capital city area rose most between months. The rental price index on the other hand was down by 1.1% between months in August. Despite this decrease, the 12-month change in the rental price index is higher than in the housing price index, or 12.2%.
According to payment mediation figures, published last week by the CBI, payment card turnover by domestic households grew by 6.5% between years in August, having regard for changes in the exchange rate and domestic price levels. The increase measured 3.7% in Iceland and 19.3% overseas. This indicates that household demand for goods and services remains fairly strong domestically, despite high interest rates. Payment card turnover by visitors to Iceland grew by 3.5% between years in August, at fixed exchange rates. Tourist numbers are up by 0.3% between years, meaning that payment card turnover per tourist is up by 3.3% between years.
The US Federal Reserve cut rates by 0.5 pp and the Bank of England kept rates unchanged. UK inflation was unchanged at 2.2% between months.
Government Debt Management auctioned Treasury bills and cancelled a scheduled Treasury bond auction. Heimar expanded a bond series, Arion Bank issued a new USD-denominated Additional Tier bond, Hagar auctioned bills, the City of Reykjavík auctioned bonds and Landsbankinn concluded a covered bond auction and exchange offering.

Statistics and market data

Weekly bulletin 23 september 2024 (PDF in Icelandic)

Disclaimer

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