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Macro week ahead – January data for Russia

In Russia, the week starts with Rosstat releasing its monthly raft of economic statistics for January, including data on IP, internal demand and the labour market. On Wednesday, the regular weekly CPI is due out in Russia. Otherwise, the main focus is the CBRT and Hungarian central bank meetings tomorrow, while on the data front we await the January IP statistics from Poland and CPI from South Africa.

In Russia, the January data is unlkely to ease concerns over the fragile momentum in the economy. As the stellar performance in agriculture came to a close in late 2013, there is mainly the beneficial base effect that could help monthly statistics.

We do not expect any positive surprises on the production side, as hard frosts since mid-January have supported electricity and gas output, while the construction industry might be hurt. Meanwhile, the favourable base effect is likely to help the manufacturing industry remain above the waterline, albeit weather-adjusted electricity consumption guided for a drop.

Consumer demand trends might have followed a downward path last month given the stalled-to-stagnant non-CIS imports and a sharp slack in car sales. To add, in January a sharp seasonal decrease in labour demand seems to have pushed the unemployment rate above 6.0%.

While Russia will likely be evenly populated with top-tier data, elsewhere in CEMEEA we shall be focusing mostly on Tuesday, when two central banks are to decide on interest rates. In Turkey, after more than doubling interest rates, we see the MPC signalling its readiness for more tightening if needed, but leaving rates on hold, anchoring inflation expectations without further dampening the growth outlook.

In Hungary, the central bank is to remain dovish and deliver another rate cut (10bp), but leave narrower room for further easing as persistently modest inflation will likely become of less importance than the forint and financial market conditions.

Vladimir Kolychev, Daria Isakova
VTB Capital analyst


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