Key events are weekly CPI for 21-27 May
The only important macro data release this week is the weekly CPI for 21-27 May on Wednesday.
The last week in the month is fairly light in terms of data releases, as usual. However, as the CBR is coming closer to its first cut in the repo rate, the CPI dynamics (even on a weekly basis) become of more importance. Since April, the key CPI growth drivers have been vegetables, where the seasonal pick-up in prices started earlier this year. The most recent CPI data pointed to a slight increase in the headline reading to 7.4% YoY as of 20 May (according to our calculations), but it was the first week when the growth in vegetables prices matched last year's (2.6% WoW). In our view, vegetables prices will continue to grow in the weeks ahead, albeit the base effect will become favourable resulting in a decline in the headline CPI. We continue to expect headline CPI to show 7.2% as of end of May.
Maxim Oreshkin, Daria Isakova
VTB Capital analyst
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