Weekly Bulletin 14 October 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.
14 October 2024
The week ahead
- Tomorrow morning, we will present our new forecast leading up to the year 2027 at a morning meeting in Harpa. Later the same day, HMS releases the housing price index.
- On Wednesday, the Central Bank of Iceland (CBI) releases the minutes of the Monetary Policy Committee’s last meeting and payment mediation figures for September. HMS publishes the rental price index and we’ll see inflation figures for the UK.
- On Thursday, Hagar publish results.
Image of the week
The ratio of foreign labourers in the domestic labour market has risen from around 7% at the beginning of 2005 to 32% in August of this year. Foreign labourers move to the country during upswings and the group diminishes quickly in downturns. This has the impact that unemployment does not increase as much as it otherwise would during economic slumps, nor does it decrease much in boom periods. Fluctuations in unemployment are as a result less pronounced. The influx of foreign labour in the market has now slowed down, in keeping with the cooling currently taking place in the economy.
Highlights of the previous week
- Price measurements for the October Consumer Price Index were carried out last week. We expect the CPI to rise by 0.27% between months and annualised inflation to decrease from 5.4% to 5.1%. We expect annualised inflation to continue on a downward trajectory in the coming months and to recede to 4.2% by January 2025.
- Around 223,000 non-domestic travellers passed through Leifsstöð International Airport in September, a 2% increase from September 2023. A total of 1,744,000 travellers visited Iceland in the first nine months of the year, representing an increase of just over 1% from the same period the previous year. In the month of September, tourist departures have only once exceeded this year’s total and that was in 2018, when September departures were 4% higher. Departures in the first nine months of the year were 5% fewer now than in the record year 2018.
- Registered unemployment was 3.3% in September, up from 3.2% in August. Unemployment is generally lowest during the summer months and increases moving into winter. This month-over-month increase represents normal seasonal changes. Unemployment was 0.3 percentage points higher in September of this year than in 2023, continuing the trend of the last few months and indicating that there is growing slack in the labour market.
- Inflation in the US receded from 2.5% to 2.4% in September. While annualised inflation has receded between months, the measurement was slightly higher than expected, increasing the likelihood that more measured steps will be taken in the rate-cutting process at the next decision date on 6 November. The annualised change to the core index, i.e. excl. food and energy, rose from 3.2% to 3.3%.
- Ölgerðin (investor presentation) published results. Icelandair and Play released September load figures.
- Landsbankinn concluded a covered bond auction and offered switches. RARIK, Hagar and Lánasjóður sveitarfélaga auctioned bonds. Government Debt Management published Markaðsupplýsingar and announced the results of a tap.
Statistics and market data
Weekly bulletin 14 October 2024 (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.
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.
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