Key events in EMEA and Latam next week

The Bank of Russia is likely to keep the 4.25% key rate unchanged at the upcoming monetary policy meeting on 18 September.

The arguments in favour of a pause in the rate cut cycle include strengthening of CPI, better than expected trend in the overall GDP and consumption, increased volatility on the local financial market, and a halt in the rate cycle among Russia’s peers. Meanwhile, the mid-term guidance should not exclude further cuts in the next six months, provided external factors, including foreign policy context, allows it.

In other events, macro activity data for August should point at some modest recovery in industrial output, constrained by the adverse calendar factor, and some recovery in consumption, though the latter might have been limited by the re-opening of outward tourism to popular resort destinations.

Poland's central bank meets next week and is unlikely to bring much new to the table. Recent real activity figures showed substantial recovery, but the Council is likely concerned with the strength of the zloty, possibly underlining CPI may continue to slide down in the coming months. Hence it’s unlikely that the current consensus within the MPC of flat rates for long should change.

In terms of key figures next week we expect solid industrial production growth, slightly above consensus. A rise in PMI export orders suggests industrial recovery should be more balanced compared to July (when automotive played the key role). We also expect a less deep contraction of employment compared to the consensus.

Overall the figures should support our scenario of fast GDP recovery this quarter.