The Bank of Russia unexpectedly maintained its key interest rate at a record-high 21% , defying analysts’ expectations of another significant hike as inflation remains stubbornly elevated. The decision marks a shift toward a more measured approach in balancing economic growth and price stability. Key Details Inflation Concerns: Annual inflation climbed to 8.9% in November, well above the central bank’s 4% target , with inflation expectations reaching 13.9% in December. Policy Rationale: The central bank cited the significant tightening of monetary conditions after October’s 200-basis point hike as sufficient to resume disinflationary processes. Governor Elvira Nabiullina emphasized avoiding both economic overheating and severe slowdowns. Economic Overheating: Elevated government spending on the war in Ukraine and social programs, coupled with labor shortages and rising wages, have fueled strong domestic demand, exacerbating price pressures...
Aluminium prices extended their decline from a two-month high as concerns over China's demand recovery persisted, coupled with ample global supplies. The metal has dropped nearly 4% since Tuesday's close, reflecting the broader trend in industrial metals, which are also facing downward pressure due to a weakened risk appetite in financial markets.
Key Takeaways:
Aluminium Price Decline: Aluminium has fallen almost 4% since Tuesday, driven by concerns over China's sluggish demand recovery and sufficient global supplies, leading to a widening discount in spot prices.
Broader Impact on Industrial Metals: The weakening of risk appetite in financial markets, exacerbated by underwhelming earnings from tech companies, contributed to declines in other industrial metals like tin and copper.
Market Outlook: Analysts predict further declines in aluminium prices, citing elevated supply levels and limited downstream demand recovery in China as key factors influencing the market.
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