Russia rate decision will be the main event in EMEA. Although a close call, CBR is expected to keep policy rates unchanged. The market is split on the rate decision with only 12 out of 23 economists expecting the CBR to cut its policy rate. While previously the cut cycle was expected to begin this month, not enough has happened to warrant a cut at this time. True that inflation in November decelerated to 15% y/y from 15.6% y/y in October, and inflation is expected to decline in the coming months on strong base effects. 

However, there are several headwinds that could cause re-acceleration of inflation, which could lead CBR to lean on the cautious side. The recent sanctions imposed on Turkish food imports (fruits and vegetables), as well as the enhanced border surveillance, will likely increase food prices and possibly prices of other goods imported from Turkey. Not only that but given the challenging oil outlook, pressures on fiscal balances and RUB persists.