Key events in EMEA and Latam next week

Russian industrial production is likely to show some statistical recovery in June vs. May thanks to calendar (workday number) effects, while the household indicators, including retail sales and real salary growth should remain sluggish. While not directly linked with monetary policy, those indicators could still serve as an additional argument in favour of a cut in the key rate from the current level of 7.5% after CPI decelerated to 4.7% year-on-year in June.

We expect relatively soft activity data in June with industrial production growth at 2.9% YoY and retail sales at 3.3% (constant prices). Both figures are close to the local market consensus. The strong deceleration is related to a difference in working days and a strongly negative statistical base. In our opinion, this weakness is temporary and both indicators should return to the 5-6% level from July.

We also forecast lower wages (6.7% YoY). Our forecast remains below the consensus of local market economists (7.1%). The negative drag will likely be related to a drop in the construction sector. We still see an acceleration in the coming months as the share of companies mulling wage increases is very high.