Key events in EMEA and Latam next week

We expect industrial production to accelerate from -1.3% in August to 4.1% in September, close to the market consensus (4.7%). Seasonally-adjusted figures also point to a recovery. The weak August performance was partially related to the disruption of oil refining and transportation from Belarus, and technical breaks in production in the automotive sector. While those factors will not feed into the September numbers we do expect to witness relatively poor production in metallurgy and other branches closely related to the construction sector.

September labour market data should be relatively stable. We expect a modest increase in wages to 7.1% year-on-year and wage growth should remain stable throughout the fourth quarter. The next significant impulse will be related to a 15.6% increase in the minimum wage in January. In our view, this should boost overall enterprise wages by 1.5 percentage points.

A set of macro data for Russia should indicate some pick-up in industrial output growth thanks to an acceleration in budget spending towards year-end, as well as a favourable calendar effect. Consumer spending should remain modest, though it is unlikely to be pivotal for the upcoming key rate decision later in October, as monthly retail trade data does not cover the fast-growing e-commerce segment and can underestimate the strength of consumption. The central bank faces a dilemma between cutting interest rates for a fourth straight time due to the underperformance in inflation and taking a pause amid global uncertainties and an acceleration in budget spending. This quandary is likely to persist until 25 October.