European Stocks Rise as U.S. Inflation Data Eases Fed Rate Hike Fears 
Japan Services Producer Prices Rise 3.2% in June, Supporting BOJ Rate Hike Expectations 
Trump Imposes New US Tariffs on Drone Imports Over National Security Concerns 
China Automakers Accelerate Global Expansion as Domestic Car Sales Slump 
Gold Prices Rise as Weak US Retail Sales Cut Fed Rate Hike Bets 
Chile Central Bank Holds Interest Rate at 4.5% as Inflation and Global Risks Persist 
Strait of Hormuz Shipping Near Standstill After New Vessel Attacks 
Oil Prices Fall as U.S. Crude Inventories Surge and Hormuz Tensions Persist 
France Inflation Rises 2.4% in July as Consumer Prices Increase 
S&P 500 Hits Record High as Soft Inflation Data Eases Fed Rate Hike Fears 
RBA Signals More Rate Hikes Possible as Australia Battles Stubborn Inflation 
Add as a preferred source on Google
The Central Bank of Russia’s (CBR) Governor Elvira Nabiullina spoke at a conference yesterday where she highlighted downside risks to inflation and the additional room now available for CBR to cut rates faster, according to the latest research report from Commerzbank.
The central bank’s next monetary policy meeting will be on October 25; while the majority of analysts expect no change in the benchmark rate, Commerzbank lean towards a 25bp cut, with further expectations of another 25bp cut in December.
CBR's previous policy guidance had been that following three rate cuts already this year, the pace of rate cuts could now slow down.
Because of this, many market commentators assume only one more 25bp cut in December. We, however, think that the combination of softer-than-expected inflation, and the more worrying news of downgrade to the fixed investment and GDP growth outlook (because of delays in infrastructure projects) means that the likelihood of a rate cut in October has increased.
Russian CPI inflation fell from 4.3 percent y/y to 4 percent already in September. CBR has cut its 2019 inflation forecast in two significant steps already and now predicts 4-4.5 percent for year-end 2019 – this estimate is highly likely to be revised lower again – in fact, Nabiullina appeared to confirm this directly yesterday, the report added.
"A 25bp rate cut would not weaken the ruble in our view because CBR is only adjusting to the inflation trend, not lowering the real interest rate," Commerzbank further commented in the report.
