CBR Dials in on CPI to Assess Longevity of Recent Inflation Spike

Headline & Core CPI at the top of the hour

• CPI Core MoM exp at 0.5% vs 0.5% prior
• CPI Core YoY exp at 4.3% vs 3.9% prior
• Headline CPI MoM 0.8% prior
• Headline CPI YoY 4.9% prior

• Expectations from sell-side that headline will print at 4.9% and peak in Feb at ~5.3%
• primarily due to food price pressures, in particular fruit and vegetables, and higher non-food good prices, likely due to a residual delayed pass-through of the weaker Ruble
• CPI is expected to moderate back to belw the CBR's 3.5-4% target by end-2021 to reach roughly 3%
• Transitory nature of this inflation spike leaves the door open to a 25bp cut in 2H21, but a cautious CBR stance in the near-term as it gauges the longevity of the spike