Gold Prices Fall Amid Rate Jitters; Copper Steady as China Stimulus Eyed 
On 13 March, the CBR cut its key rate to 14% p.a., from 15%, as consensus expected, while the market had priced an approximate 150bp cut.
The main reason given by the central bank for the cut was that 'the balance of risks is still shifting towards a more significant cooling of the economy'.
The central bank also declared it is ready to cut further on slowing inflation.
Danske Bank notes its expectations as follows on Thursday....
- As inflation continued to accelerate in February, from 15% y/y in January to 16.7% y/y, and the inflationary pressure has continued since, we see the cut as purely cosmetic, effected mainly due to political pressure.
- As we expect the CPI to slow to 11% y/y by the end of 2015, we do not exclude the key rate falling under 10% in H2 15 as the central bank follows through on its new stance.
- We remain bearish on the outlook for the RUB but we expect higher levels than in previous forecasts due to the rebound in the average oil price.
- Volatility is falling due to support for the rouble market by state corporations and a softer headline flowregarding the situation in Eastern Ukraine.
