Key events in EMEA and Latam next week

After the PMI index recently fell into recessionary territory, the market's attention should be focused on industrial production. We expect a sub-consensus figure of 1.1% year-on-year vs. the 2.5% median market forecast. Still, the industrial sector should maintain growth in the coming months – a contraction looks unlikely.

The October labour market data should show a further moderation of wage growth. We expect a soft 6.3% YoY reading due to a slowdown in manufacturing and services. Wage growth in construction and trade should stabilise close to last month’s levels. Softer activity so far is not resulting in a deterioration of employment, which should remain stable at 2.6% YoY.

We expect the National Bank of Hungary's rate setting meeting to be a non-event, with no change in rates or in the monetary policy framework. The incoming inflation data is more or less in line with the baseline of the latest central bank forecast. Despite the uptick already seen in CPI, which should continue until year-end, we do not expect any change in monetary policy. The NBH sees inflation risks tilted to the downside, according to the latest risk assessment. But this could be tweaked slightly due to a possible upside surprise in economic growth in 3Q, complemented by somewhat less gloomy external data than before.

Russian industrial production may decelerate somewhat in November on less favourable calendar/workday effects. At the same time, the recently reported surge in public spending from 4% YoY in 9M19 to 42% YoY in October suggests that the corporate sector data might surprise on the upside. It remains unclear though whether the much-awaited catch-up in public spending will be able to boost household confidence. Retail trade may come under pressure from the lower availability of consumer loans following a tightening in the macro prudential framework since 1 October. Households will have to rely more on income growth, which is unlikely to see a strong acceleration – we expect some minor improvement for September (this data now comes with a lag) mostly reflecting a CPI slowdown.