Russia inflation to resume decline and Turkey inflation to rise

In Russia, PMI likely declined as falling oil prices pressured the economy. In Turkey, PMI is expected to fall below 50, reflecting the negative effect of rising political uncertainty.

"Inflation in Turkey is expected to rise toward 7.0% y/y in August, as currency depreciation will likely feed into prices. The near-term inflation profile looked favorable in Q3. However, recent depreciation in TRY seems to work against this. Given the investor skepticism about monetary policy, currency reaction to an upside surprise in inflation would likely be negative", says Barclays.

In Russia, inflation is expected to resume declining in August after rising in July due to utility price increases. Even though the RUB has depreciated, inflation pass-through has been limited so far. 

"However, further RUB depreciation could pose a risk to inflation. This implies that a further CBR cut at its September MPC meeting could be ill advised, as it might lead to more RUB depreciation that could boost inflation. Therefore, no change is expected, projecting that the CBR will keep its rate at 11%", added Barclays.