15 July 2024
The week ahead
- Tomorrow, the Central Bank of Iceland (CBI) publishes payment mediation figures for June. Also on Tuesday, the Housing and Construction Authority publishes the housing price index for June.
- On Wednesday, inflation figures will be published for the UK and the eurozone. Sjóvá publishes interim financial statements for Q2.
- On Thursday, the ECB announces its interest rate decision. Landsbankinn and Icelandair publish Q2 results.
Image of the week
Around 212,000 foreign travellers passed through Keflavík International Airport in June, a 9% decrease from June 2023. This is the third month in a row where a decrease is registered compared to the same month the previous year. Overnight stay figures, released last week, showed an 18% decrease in registered overnight stays of non-Icelandic tourist between years in May. Turnover of non-domestic payment cards has also contracted between years, though the data is not conclusive. There are several indications that the travel industry is slowing down between years.
Highlights of the previous week
- In addition to figures on foreign tourist numbers in June, the Icelandic Tourist Board released figures on overseas travel by Icelanders. Departures by Icelanders showed a considerable up-tick in June and numbered 65,000, an increase of over 17% from June 2023. This year to date, departures by Icelanders have been just under two percentage points more numerous than the same time last year.
- Registered unemployment was 3.1% in June according to figures published by the Directorate of Labour on Wednesday, down from 3.4% in May. Despite a contraction in unemployment between months, it is nonetheless 0.2 percentage points higher than the same time last year, which may be an indication of lower tension in the labour market.
- Inflation in the US was 3.0% in June.
- In a new inflation forecast, we expect 5.9% inflation in July and that inflation will trend down to 5.4% in October.
- Icelandair and Play released June load figures.
- Alvotech finalised a debt refinancing programme.
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.
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8 July 2024
High interest rates have encouraged savings and detracted from demand in the economy. Household deposits had grown by 20% in May this year from the same month in 2023, according to the Central Bank of Iceland’s (CBI) newly published Hagvísar. Demand deposits have increased most.
1 July 2024
The consumer price index (CPI) rose by 0.48% in June. As a result, inflation measured 5.8%, down from 6.2%. Turnover based on March-April VAT reports contracted by 4.6% in real terms and the wage index rose by 0.2% in May, according to figures released by Statistics Iceland last week.
24 June 2024
The housing price index was up by 1.4% in May and the rental price index by 3.2%, according to figures published last week. While the Bank of England maintained an unchanged policy rate, the Swiss National Bank lowered its rate by 0.25 percentage points. Of most interest domestically this week is without doubt the CPI, to be published by Statistics Iceland on Thursday.
18 June 2024
Last week, we saw the publication of unemployment figures, tourist numbers and domestic payment card turnover in May. The US Federal Reserve kept its policy rate unchanged. Later today, the Housing and Construction Authority (HMS) releases the housing price index.
10 June 2024
The European Central Bank (ECB) lowered its policy rate last week. Stronger labour market figures from the US than generally expected increase the likelihood that the Federal Reserve will postpone initiation of rate cuts.
3 June 2024
Domestic product contracted by 4% in the first quarter of the year and inflation measured 6.2% in May, slightly higher than predicted.
13 May 2024
Household deposits have grown considerably alongside rising interest rates. This has resulted in greatly increased interest income for households, in fact in excess of interest expenses.
6 May 2024
A majority of the market now consider the monetary policy stance too tight. This opinion has become much more pervasive than in April, in response to steadily growing restraint alongside receding inflation and unchanged interest rates.
29 April 2024
Economic growth will be limited in coming years according to our newly published macroeconomic forecast up to and including 2026. We forecast 0.9% growth this year, 2.2% next year and 2.6% in 2026. We expect inflation to recede down to 5.5% by the fourth quarter of this year. A rate-cutting cycle will begin in October, so our forecast, and we expect the economy to pick up speed alongside falling interest rates.
29 April 2024
Landsbankinn Economic Research forecasts limited economic growth this year. Inflation remains persistent and rate cuts aren’t expected until this fall.