6 August 2024
A better insight will hopefully be gained into the travel and hospitality sector later this week when the Icelandic Tourist Board releases departures from Leifsstöð International Airport, and both Icelandair and Play publish load figures.
The week ahead
- On Thursday, the Central Bank of Iceland (CBI) publishes the real exchange rate for July. Statistics Iceland publishes preliminary figures on foreign trade in July and updated figures for June.
- On Friday, the Icelandic Tourist Board releases departures from Leifsstöð International Airport and the Directorate of Labour registered unemployment; both publications are for the month of July.
Image of the week
Many central banks raised policy rates in response to rising inflation in the post-pandemic era. Inflation is trending downward in most countries and central banks have either already initiated rate-cutting regimes or look set to do so. The central banks of Europe, the UK, Sweden and Switzerland have begun lowering rates while central banks in the US, Norway and Iceland have not. The next policy rate decision at the US Federal Reserve is in September and the likelihood of a rate cut is considered high. In contrast, Landsbankinn Economic Research considers the likelihood of a rate cut at the next decision date in Iceland, which is in August, non-existent.
Highlights of the previous week
- Overnight stays by non-domestic travellers at all registered accommodation types contracted by 1.4% in June. Hotel stays by non-domestic travellers are down by 8.5% while overnight stays at other accommodation types increased by 11%. Hotels are generally more expensive than other types of accommodation. Registered overnight stays in June contracted rather less than traveller numbers, which are down by 9%, and non-domestic payment card turnover, which contracted by 14% at a fixed exchange rate.
- The US Federal Reserve kept its policy rate unchanged while the Bank of England lowered rates by 0.25 percentage points. There was a lack of consensus about the decision at the Bank of England, with four out of nine of the Bank’s Monetary Policy Committee members preferring to maintain unchanged rates.
- Festi (investors' presentation) published results.
- Reitir tapped its bond series REITIR150534
Statistics and market data
Disclaimer
This review and/or summary is marketing material intended for information purposes and does not constitute financial advice or an independent financial analysis. 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.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, available 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.sedlabanki.is/fjarmalaeftirlit).You may also be interested in
12 August 2024
Departure by non-domestic travellers from Leifsstöð International Airport in July were very similar to the previous year while departures by domestic tourists are somewhat fewer. August measurements for the consumer price index take place this week and several listed companies publish results.
15 July 2024
The volume of travellers to Iceland decreased by 9% in June this year compared to June 2023. Unemployment was 3.1% in June, slightly higher than the same time last year.
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.