Highlights

  • Inflation in the USA came in at 2.5% y/y in January 2017, following 2.1% annual inflation in December 2016, above FED’s 2.0% target, thus feeding expectations of FED’s rate increase in March 2017.
  • Inflation in the Euro Zone came in at 2.0% y/y in February 2017, following 1.8% annual inflation in January 2017 and above ECB’s medium-term target of slightly below 2.0%.
  • Based on short-term indicators, growth significantly accelerated in Georgia (+5.2% y/y), turned positive in Armenia (+6.5% y/y), and slowed in Kazakhstan (+3.8% y/y) in January 2017.
  • In January 2017, Azerbaijan also returned to growth territory (+0.8% y/y), while economic activity in Belarus was down 0.5% y/y.
  • Compared to the previous month, inflation in January 2017 retreated in Azerbaijan (+11.9% y/y), Belarus (+9.5% y/y), Kazakhstan (+7.9% y/y), and Russia (+5.0% y/y). Meanwhile, inflation increased in Turkey (+9.2% y/y), Ukraine (+12.6% y/y), and Georgia (+3.8% y/y). Armenia remained in deflationary territory, with prices down 0.6% y/y in January 2017.
  • In February 2017, the monetary policy rate was lowered in Armenia (to 6.0%, down 0.25ppts), Belarus (to 16.0%, down 1.0ppts), and Kazakhstan (to 11.0%, down 1.0ppts).

Please see the full report for detailed coverage of the fixed income markets of Georgia, Armenia, Azerbaijan, Belarus, Kazakhstan, and Ukraine.