Highlights

  • Latest US non-farm employment figures came in below expectations in August 2016, lowering the probability of the FED increasing rates at the September 2016 meeting.
  • Bank of England lowered its policy rate from 0.5% to 0.25% in August 2016, the first change in seven years. At the same time, BoE increased asset acquisition by GBP 60bn to GBP 435bn.
  • Based on preliminary data, economic activity improved in Kazakhstan from 0.3% y/y in June 2016 to 0.6% y/y in July 2016 and remained flat in Ukraine at 1.7% y/y. GDP growth slowed in Georgia from 2.9% y/y to 2.1% y/y. GDP contraction in Russia worsened from 0.6% y/y to 0.7% y/y, while economic activity in Armenia contracted 4.3% y/y in July, compared to 1.9% y/y growth in June.
  • Based on preliminary data, the GDP contraction in Azerbaijan eased from 3.4% y/y in the 1H16 to 3.0% y/y in 7M16, while GDP declined further in Belarus from 2.5% y/y in 1H16 to 2.7% y/y in 7M16.
  • Annual inflation remained at double-digit levels in Azerbaijan, Belarus, and Kazakhstan, and in the 7-8% range in Russia and Ukraine. Prices were barely up in Georgia and down in Armenia.