This week sees a major release of macroeconomic data for Russia, with Rosstat to publish its top tier data starting with IP today, then unemployment, retail sales, investment and real wages data due on Friday 22 May. In addition, the regular weekly CPI print is scheduled for Wednesday.
Meanwhile, in CEMEEA, the headlines are likely to come from two monetary policy decisions. The first is Turkey, where the MPC gathers on 20 May, while the South African Reserve Bank makes its decision on 21 May.
The top tier package is to bring more detail as to how the economy fared in the first month of the second quarter. We expect the IP continued its decline in YoY terms, while in sequential terms the drop might see a moderate acceleration because the one-off factors that helped it in the previous month dissipated and a stronger RUB probably started to withdraw some of the previous support to the tradable industries.
Meanwhile, RUB’s appreciation has probably propped up consumer confidence and, while lending standards are still limiting demand (especially for big ticket durables), we expect that both food and non-food retail sales were stronger than in March. On the labour market front, the type of price adjustment (by declining wages) is still underway, but we expect to see more of the traditional increase in the unemployment rate which by the YE15 might reach 6.4% (we expect the April print to show 5.7-5.8% SA).