Asian Currencies Subdued as Yen Slides Ahead of Fed, BOJ Decisions 
German 2-Year Yield Hits 2023 High as Rate Hike Bets Rise 
UK Inflation Rises to 3.1% Ahead of BoE Rate Decision 
Gold Prices Fall as Hot U.S. Inflation Boosts Fed Rate Hike Bets 
Oil Prices Surge as Houthi Attacks Raise Saudi Supply Fears 
Hormuz Vessel Traffic Drops to Single Digits 
Oil Prices Fall as U.S. Crude Inventories Rise, Middle East Risks Persist 
UK Wage Growth Slows as BoE Rate Decision Looms 
BOJ Flags Import Costs and Yen Shocks as Persistent Inflation Risks 
Asian Stocks Steady as AI Shares Rebound Ahead of Fed Decision 
Asian Bank Stocks Slide as BofA Warning and Rising Yields Hit Sentiment 
Saudi Arabia Raises Security Alerts as Houthi Attacks Threaten Oil Routes 
Vietnam, U.S. Firms Plan 29 Deals Across Energy, Tech and Aviation 
Dollar Rises as Fed Hike Bets Weigh on Asian Currencies 
Oil Prices Surge as Houthi Attacks Deepen Hormuz Supply Fears 
China Industrial Output Beats Forecasts as Exports Support Growth 
Gold Prices Slip as Fed Rate Hike Looms, Treasury Yields Rise 
Add as a preferred source on Google
Russia ended 2019 on a disappointing note in terms of consumer price inflation (CPI), which dropped to 3 percent y/y, close to the Central Bank of Russia’s (CBR) lower target range and is expected to fall nearly to 2 percent on a temporary basis during the first quarter of this year, according to the latest research report from ING Economics.
Looking at the CPI composition, food products (38 percent of consumer basket) seems to be the sole disinflationary component, with food CPI slowing from 3.7 percent y/y in November to 2.6 percent y/y in December on a higher statistical base, while non-food CPI growth stayed unchanged at 3.1 percent y/y amid accelerating gasoline price growth, and services CPI decelerating only marginally from 3.9 percent y/y to 3.8 percent y/y.
Global grain prices, seem to be heading north again after showing a negative to flat y/y performance in the middle of 2019. Global wheat prices in US dollar terms were up 11 percent y/y in December 2019 and flattish in rouble terms, with roughly similar expectations for 1Q20, depending on RUB performance, the report added.
Inflationary expectations, as reported by the Bank of Russia, deteriorated in December both for households and corporates, which may suggest some reassessment of the CPI prospects after November's Black Friday promotional discounts.
In the meantime, the consumer sentiment index in December was reported at 95 points, which is 6 points higher than a year ago, while retail trade growth accelerated to 2.3 percent y/y in November, the highest level in 11 months, suggesting a lack of demand-driven constraints to CPI growth.
"While we agree that the likelihood of that scenario has increased, we still believe that the final decision will be a close call, and see the following arguments against a cut," ING Economics further commented in the report.
