My USD watch and learning: Next year's growth is expected to reach similar figures

Polish inflation came out somewhat on the low side at 2.7% y/y in November – lower than our forecast of 3.0% y/y and consensus of 2.9% y/y. With inflation surprising on the downside, there is no need for a hike in Poland any time soon.
South African inflation in November came out slightly higher than expected accelerating 3.6% y/y, up from 3.4% in October. Higher inflation was driven by petrol prices and food prices. This is something the South African central bank will be watching closely in the coming months as both food and petrol prices are seen as the main cost-pushed inflationary risks to South African inflation. Rising food and petrol prices could discourage the South African central bank from easing monetary policy further.
Kazakhstan’s Economy Ministry raised its GDP growth forecast for 2010 from 5% to more than 6%.Growth at the nine-month stage in 2010 was 7.5% and high commodity prices continue to support the economy. Next year’s growth is expected to reach similar figures.

Russian industrial production for November is due today or tomorrow. Although we expect the headline figure to remain at a moderate 6.2%, the continuing strength of the manufacturing sector would strengthen our optimism on Russian growth prospects.

Expectations of monetary tightening in Russia continue to push up Russian swap yields after more new hawkish comments from central bankers in Russia yesterday. However, it should also be noted that there is not much liquidity in the Russian markets at the moment – which is contributing to the spike in yields – but nonetheless it is clear that Russian central bank will initiate monetary tightening in 2011. In fact we would expect the CBR to hike as early as the end of January. This could give further upward momentum on Russian yields going forward.

My USD watch and learning