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COUNTRY INSIGHTS

Somewhat stronger forint today on GDP data and comments by the finance minister
HUNGARY · In Brief · 14 Feb 2020

The forint moved upwards today, to EURHUF 335-336 in early afternoon trade. We see two factors potentially behind this.First, GDP growth was reported at 4.5% yoy for Q4 and 4.9% for the full year. Some presented this as a positive surprise, as e.g. Portfolio.hu had a 4.2% yoy average analyst expe...

Inflation continues to move lower
ISRAEL · In Brief · 14 Feb 2020

January's CPI declined to 0.3% y/y (-0.4% m/m), slowing from 0.6% y/y in December. Inflation came in at the low end of consensus (according to Bloomberg, the market was expecting -0.3% m/m). Core inflation (the CPI excluding all energy items and fresh produce) moderated as well, reaching 0.35% y/...

Central Bank of Russia selling half its stake in Sberbank
RUSSIA / FSU POLITICS · In Brief · 14 Feb 2020

On February 11 it was announced that CBR is selling 50% of its stake in Sberbank. The foreign exchange assets that are the proceeds of the sale will be utilized to purchase RUB over the next few years. The government is now breaking its fiscal easing rule. Until now oil revenue from prices north ...

President Ramaphosa's State of the Nation Address (SONA) 2020
SOUTH AFRICA · In Brief · 13 Feb 2020

After over 90 minutes of delays and disruptions caused by an orchestrated EFF interruptions, and following a short break in the parliamentary procedures, President Ramaphosa was finally given a chance to deliver his 2020 SONA. He presented a realistic and somewhat determined message to the nation...

CPI-inflation unexpectedly exploded in January
HUNGARY · In Brief · 13 Feb 2020 · 1 response

CPI-inflation for January was reported at 0.9% mom, 4.7% yoy this morning, the yoy rate up from 4% in December, far above target and also markedly above the top end of the central bank's tolerance range. The MNB's forecast was 4.3% yoy, Portfolio.hu's analyst consensus expected 4.4% yoy, and our ...

Ukrainian president appoints a dove as chief of staff
RUSSIA / FSU POLITICS · In Brief · 13 Feb 2020

On February 11 President Zelensky promoted Andriy Yermak as his chief of staff. Yermak was pivotal in negotiating a prisoner exchange with Russia in 2019. Moscow responded to Yermak's appointment by saying that its point man for Ukrainian affairs would be Dmitry Kozak. Kozak was born in Ukraine t...

Three Baring Vostok executives released into house arrest
RUSSIA / FSU POLITICS · In Brief · 12 Feb 2020

On February 12 it was announced that 3 Baring Vostok executives have been let out of jail and allowed to live under house arrest. The three Russian men were partners in the private equity company and were held in prison awaiting trial in 2019. A Frenchman and an American who were their co-accused...

Coronavirus concerns ease, but the Gulf has clear vulnerabilities
GULF COUNTRIES · Report · 12 Feb 2020

Highlights: * Lower oil prices, even only temporarily, will exacerbate fiscal challenges and will drive further OPEC action. * Countries most exposed to trade with China, such as Oman, could be at greater risk. * Supply chain problems in China could boost import prices, but total inflation w...

CBR: Government purchase of Sberbank to effectively amend the fiscal rule, affect markets
RUSSIA ECONOMICS · Report · 12 Feb 2020

Yesterday Russian authorities announced that the controlling stake in Sberbank, the nation’s largest commercial bank, currently held by the Central Bank of Russia, would be sold to the Finance Ministry. The deal will be financed by the National Wealth Fund (NWF). The deal is structured in such a ...

China’s local bailout funds
CHINA ADVISORY · Report · 12 Feb 2020

China is gradually improving the economy’s ability to handle defaults. Beijing is designing various mechanisms for allowing failure of both companies and securities. In a previous note, we discussed the growth of local asset management companies. Here, we look at another program – local governmen...

​Idlib: Erdogan reads the riot act
TURKEY · In Brief · 12 Feb 2020

President Erdogan’s speech in parliamentary caucus today has ramifications beyond Turkey’s Idlib policy. It is obviously affecting the exchange rate, which slipped another notch vs the dollar, as I wrote these lines, and it may be the last warning to Putin. "If any harm comes to our soldiers in o...

Russia's internet facing obstacles
RUSSIA / FSU POLITICS · In Brief · 11 Feb 2020

A report leaked on February 10 stated that when Russia trialed the sovereign internet in fall 2019 it experienced serious problems. The test revealed that a sovereign internet meant slower access and poor quality. The internet became inaccessible for several minutes in some places. The aim of the...

Russia plans to hold referendum on constitution
RUSSIA / FSU POLITICS · In Brief · 11 Feb 2020

On February 11 one of Russia's main newspapers (Vedomosti) reported that the government's proposed referendum on constitutional amendments will have a goal of 70% turnout and 70% voting in favor. The government had the same goal for the 2018 presidential elections and achieved it. Opinion polls s...

​Failed peso-debt placement opens the question about whether to re-profile or monetize the AF20 bond
ARGENTINA · In Brief · 11 Feb 2020

As a new setback for the government's financing strategy, the Ministry of Economy reported late yesterday that the tender to reopen three peso bonds, to pay the upcoming amortization of the AF20 bond, has been declared void. This failure happened even though the three offered instruments covered ...

Zelenskiy dismissed Chief of Staff Andriy Bohdan
UKRAINE · In Brief · 11 Feb 2020

President Zelenskiy dismissed Andriy Bohdan, Chief of Staff of the President Office, according to the President Office web-site. Andriy Yermak, president’s advisor, is the new Head of the President Office. Rumors about the potential dismissal of Bohdan had been circulating already for few days. B...

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