Macro week ahead
In Russia, this week is to start with the monthly raft of economic statistics for July, which includes data on internal demand and the labour market (due today or tomorrow). We shall also obtain the latest monthly CPI report for July in our CEEMEA universe, with South Africa releasing its estimate.
Tomorrow, there is due to be a monetary policy decision from the Central Bank of the Republic of Turkey, and Poland’s IP report for last month. We also have the regular release of the weekly CPI data in Russia on Wednesday.
In addition to Russia’s downbeat IP report for July (released last week), the upcoming full pack of economic statistics is likely to provide more evidence of a cyclical slowdown in the economy. As for local demand, the better but still negative dynamics in car sales (a slower contraction) and rebounding growth of non-CIS investment imports last month might imply that consumer demand remained bleak, while investment data likely recovered in July (from a post-crisis low a month ago), partly on a more beneficial calendar factor. However, the key data point at the moment is the labour market, which started cooling sharply in April. We expect the recent upward trend in SA unemployment to persist, although the pick-up in July might not be that significant, following the jump in the June data. The lack of a stimulus so far from the authorities and the deteriorating labour market situation will, in our view, force a faster policy reaction later this year.
Maxim Oreshkin, Daria Isakova
VTB Capital analyst
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