-
Policy
Policy
Exclusive interviews with leading policymakers that convey the true policy message that impacts markets.
LATEST FROM POLICY: -
EM Policy
EM Policy
Exclusive interviews with leading policymakers that convey the true policy message that impacts markets.
LATEST FROM EM POLICY: -
G10 Markets
G10 Markets
Real-time insight on key fixed income and fx markets.
Launch MNI PodcastsFixed IncomeFI Markets AnalysisCentral Bank PreviewsFI PiFixed Income Technical AnalysisUS$ Credit Supply PipelineGilt Week AheadGlobal IssuanceEurozoneUKUSDeep DiveGlobal Issuance CalendarsEZ/UK Bond Auction CalendarEZ/UK T-bill Auction CalendarUS Treasury Auction CalendarPolitical RiskMNI Political Risk AnalysisMNI Political Risk - US Daily BriefMNI Political Risk - The week AheadElection Previews -
Emerging Markets
Emerging Markets
Real-time insight of emerging markets in CEMEA, Asia and LatAm region
-
Commodities
-
Credit
Credit
Real time insight of credit markets
-
Data
-
Global Macro
Global Macro
Actionable insight on monetary policy, balance sheet and inflation with focus on global issuance. Analysis on key political risk impacting the global markets.
Global MacroDM Central Bank PreviewsDM Central Bank ReviewsEM Central Bank PreviewsEM Central Bank ReviewsBalance Sheet AnalysisData AnalysisEurozone DataUK DataUS DataAPAC DataInflation InsightEmployment InsightGlobal IssuanceEurozoneUKUSDeep DiveGlobal Issuance Calendars EZ/UK Bond Auction Calendar EZ/UK T-bill Auction Calendar US Treasury Auction Calendar Global Macro Weekly -
About Us
To read the full story
Sign up now for free trial access to this content.
Please enter your details below.
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
Real-time Actionable Insight
Get the latest on Central Bank Policy and FX & FI Markets to help inform both your strategic and tactical decision-making.
Free AccessCPI Spike May delay CBR 25bp cut to 1Q21; Caution Prevails until CPI Moderates
CBR PREVIEW 18/12/20 - 1030GMT / 0530ET
- POV: CPI Spike May delay CBR 25bp cut to 1Q21; Caution Prevails until CPI Moderates
- CBR is expected to keep rates unchanged at 4.25% following a short-term spike in inflation - forcing institutions to pare back November's cut and dry expectations for 25bps of easing at this meeting. Conditions since then have changed dramatically, and by the CBR's previous criteria for a 25bps cut (RUB appreciation & reduction in geopolitical risks), we should be seeing a cut Friday.
- However, a pronounced headline CPI overshoot in November (+4.4% YoY) on accelerated food inflation, robust loan growth & base effects outpaced the CBR's +3.7%-4.2% YoY end-year forecast by some margin - leading to reduced policy space at this meeting. Headline should peak at 4.9% YoY in Feb once the food supply shock and base effects subside, followed by a 2H21 moderation to 3.0% on expectations for a sustained output & consumption gap.
- Since end-Nov, the RUB has appreciated ~4% vs the USD on firmer oil prices and broadly accommodative global risk sentiment - which will be looked upon favourably by the CBR, but may not be enough to tip the scales towards a cut.
- Recent CBR comms point to a mixed to slightly hawkish tilt following months of dovishness. Nabiullina offset IMF pressure to cut below 4%, highlighting limited easing space, a "material" rise in CPI and poorly anchored expectations. Markets see 25bp of cuts still in the pipeline with Mosprime-3x6 RUB FRA spreads at 17.5bp (narrowed 7.5bp Dec 10) - but timing remains the primary concern.
- Hence, our base case is for a 25bp cut to be delayed until Feb/March, but cannot discount chances of a cut at this meeting. 4.00 is seen as the near-term floor to rates with vaccines expected to bolster 2H21 activity - offsetting the need for a deeper terminal rate (~3.5% as some expect) and augmenting CBR flexibility to future shocks
To read the full story
Sign up now for free trial access to this content.
Please enter your details below.
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.