Free Trial

SELL SIDE VIEW: Consensus for a Hold at 4.25%; Short-Term CPI Spike Reduces Policy Space

CBR

Sell-Side View

  • GS: Short-term inflation spike to 4.9%YoY in Feb forces revised call for 25bp cut at this meeting to postpone to 2Q21, but still sees 3.5% terminal rate. Higher sequential weekly CPI prints reinforce hold stance. Expect a slowdown in activity for end-2020 into early 2021.
  • BofA: CBR more likely than not to cut 25bp. Base effects should push headline inflation below 4% target in 2Q21 and keep it there for 2021, persistent economic weakness, reversal in RUB depreciation provide space for easing. If there's no cut this meeting, CBR will delay to Feb/March meeting.
  • SocGen: Biased to hold, Should 'temporary' factors fade quickly during 1Q21, the CBR may well preserve dovish guidance and could even promote some monetary easing. Highlights Nov supply shock inflation above CBR forecasts. 2H21 CPI to moderate to 3.5-4.0%. Nabiullina pared down IMF calls for sub-4% rates with hawkish comments. Sees rates at 4.5% in 4Q21.
MNI London Bureau | +44 020-3983-7894 | murray.nichol@marketnews.com
MNI London Bureau | +44 020-3983-7894 | murray.nichol@marketnews.com

To read the full story

Close

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.