Key events in EMEA and Latam next week

We expect the coronavirus story to affect business confidence considerably and eight-year high inflation won’t sit well with consumers, pushing their confidence significantly lower. The really strong wage growth won’t help in this case, as the expected 13.6% December wage growth will be highly affected by one-off payments and bonuses.

On Friday, we will see the details behind the surprisingly strong GDP growth, where we expect a strong contribution by services and construction. The most important event of the week will be the central bank meeting.

In line with Vice Governor’s words, we don’t expect any type of material change as the next meeting will be in March with a new inflation forecast. However, the statement might point out to the elevated upside risk related to the inflation outlook and will make it clear if incoming data and its new forecast warrants the central bank to intervene to preserve price stability over the six to eight quarter horizon.

So what we are likely to see are some hawkish-like hints without any clear commitment.