Highlights

  • OPEC deal to cut production resulted in a surge in crude oil prices, up more than 15.0% in two days, reaching a record high level in over a year.
  • The election of Donald Trump as US president lead to a drop in bond prices globally, appreciation of US$, and capital outflows from many emerging markets, pressuring their local currencies.
  • According to short-term indicators, growth accelerated in Ukraine (+6.1% y/y), but retreated in Kazakhstan (+1.9% y/y) and Georgia (+1.3% y/y).
  • The contraction in Russia eased to 0.5% y/y in October 2016, while the indicator of economic activity for Armenia posted a further decline (-7.8% y/y).
  • Negative growth persisted in Azerbaijan and Belarus at 3.7% y/y and 2.8% y/y in 10M16.
  • Annual inflation increased to 12.4% in Ukraine and to 15.6% in Azerbaijan in October 2016. Inflation eased to 11.5% in Kazakhstan, to 6.1% in Russia, and to 11.0% in Belarus. Georgia entered deflationary territory in October 2016, with inflation at -0.2%, while deflation in Armenia declined to -0.9%.
  • Easing of monetary policy took place in Armenia (down 0.25ppts to 6.5%) and Kazakhstan (down 0.5ppts to 12.0%).

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