May 21, 2019
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Core inflation will likely fall back within the narrow range in which it has fluctuated for the past year.
The geopolitical premium marked the evolution of oil prices in 2Q18. OPEC may decide to boost production to compensate the shortfall left by Iran and Venezuela. Prices will remain supported by robust demand from China, India and the US. We continue to expect convergence to long-term equilibrium as demand growth converges to…
Financial market volatility and concerns on raising U.S. production have weighted on prices through 1Q18. However, fundamentals have not changed significantly; thus, we maintain our baseline scenario. Demand will remain supportive of higher prices, but its impact will be compensated by growing non-OPEC supply.
Further price increases in the short-run supported by robust demand and inventory correction. Geopolitical factors could lift prices further. In the mid-term, supply is expected to catch up with higher prices, intensifying the fight for market share.
In August, consumer prices rose by 0.52%, higher than the consensus (0.1%) and even our estimate (0.3%). FX pass-through mostly on the recent appreciation of Euro, second round price effects and spill-overs from the narrowing output gap continued to be the factors behind. We expect the headline to stay close to 11% before i…
Import prices increased 0.2% MoM due to higher fuel prices, but still less than expected. Nonagricultural export prices increased for the first time in ten months. Rising oil prices and the weaker U.S. dollar effect should move prices up going forward