Key events in EMEA and Latam next week

We expect the Central Bank of Russia (CBR) to cut the key rate by 25 basis points to 6.75% on 25 October, following dovish statements by CBR Chair Elvira Nabiullina. She indicated that the CBR will lower its year-end 2019 CPI forecast (currently at 4.0-4.5%), which is not customary for a non-core meeting. The lowering itself makes perfect sense, as CPI is already at 3.8-3.9% YoY, below the CBR’s year-end target of 4.0-4.5%. She also indicated that the CBR will consider a faster pace of key rate cuts vs the one originally planned. As a reminder, the tone of the previous statements suggested the CBR still saw scope for a further reduction in the key rate (currently at 7.0%), but was not going to keep cutting at every meeting, as was the case the previous three times.

Following large easing moves in 3Q with the increasingly more accommodative policy stance of global central banks and improving price pressures, the CBT had signalled to come up with more measured moves that would be conditional on the inflation path. Given the easing geopolitical tensions and currency recovery with the agreement between US and Turkey, the bank will likely consider to act and cut the policy rate by 100bp to 15.5% in the October rate setting meeting.

* Updated 21/10/19

The National Bank of Hungary sets interest rates on 22 October. Both hard and soft data externally and domestically suggest the economy is progressing in line with the NBH’s latest view presented in September. We don’t see any change related to the monetary policy setup. There is also very little reason for the NBH to add forward guidance to its press release. The main message will remain that the central bank is carrying on with its cautious and data-driven approach, while it's expected to highlight the asymmetric risks (tilted to the downside) to inflation.