Weekly bulletin 27 November 2023

27 November 2023

The week ahead

On Wednesday, Statistics Iceland is set to publish the CPI for November. We updated our inflation forecast following publication of the housing price index and now forecast a 0.47% increase of the index in November and 8.1% inflation instead of 8.0%. Alvotech publishes interim financial statements.
On Thursday, Statistics Iceland releases national accounts for the third quarter.
On Friday, the Central Bank of Iceland (CBI) publishes figures on the external balance of payments in the third quarter.

Image of the week

The number of first-time buyers on the housing market grew substantially in the third quarter of the year, to 1,123 or 33% of all buyers. In the second quarter, first-time buyers numbered 789, or 26% of all buyers. The percentage of first-time buyers in the third quarter is similar to pandemic times, when interest rates were at a low point and a large group saw advantages in entering the housing market. Increased demand by first-time buyers can in part be explained by the broadening of conditions to qualify for the Housing and Construction Authority’s (HMS) equity loans (“hlutdeildarlán”), allowing more buyers to take part. Unchanged policy rates could also be increasing optimism in the housing market, plus the increase in purchasing power in the latter part of the year may be a contributing factor.

Highlights of the previous week

The HMS published the housing price index for the capital area last Tuesday, revealing an increase of 0.9% between months, a lower increase than the previous month when the index rose by 1.4%. The index has risen three months in a row, by 3.1% in total. The share of multi-family dwellings in the index increased by 0.5%, rather less than the previous months, when it rose by 1.4%. Single-family dwellings on the other hand rose by 2.5% between months, up from 1.6% the previous month.
On Wednesday, the Monetary Policy Committee of the CBI announced its decision to maintain unchanged policy rates. This is the second such decision in a row. In the MPC’s announcement, it stated that the inflation outlook had worsened somewhat and that inflation expectations were still high. The MPC referred to uncertainty caused by the seismic activity on the Reykjanes peninsula as the main reason for maintaining unchanged interest levels. The tone of the announcement was stricter than in the MPC’s previous announcement and there is mention of the possible need to tighten the monetary stance at a later date.
On Wednesday, the CBI also published its Monetary Bulletin with an updated inflation and economic forecast. The CBI's opinion aligns with ours in that it considers inflation unlikely to change much for the rest of 2023 and for it to recede more slowly than previously expected in 2024.
On Thursday, Hampiðjan and Síldarvinnslan published results.
Kaldalón auctioned bills and Government Debt Management tapped into Treasury note series.

Statistics and market data

Weekly bulletin 27 November 2023 (PDF) (in Icelandic)

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.

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