EME Macro/Strategy: macro all-in-one (20-26 January)

Last week, Trump’s inauguration speech focused on “America First” policies, signalling potential trade disruptions and an energy push, while his Davos remarks called for higher NATO defence spending, criticised EU economic policies, and urged OPEC to lower oil prices. Overall, while lower oil prices are good for the region, escalating trade disruptions are a deep negative. On other events, the CBRT delivered another rate cut and shifted to a more dovish stance, prompting us to lower our year-end policy rate forecast to 38%, from 40%, although inflation risks remain. The CBU held rates at 13.5%, maintaining a cautious approach, but base effects lowering inflation could allow for 150bps of cuts in 2H25E, in our view. In the Czech Republic, business surveys pointed to a stagnation around 1.3% yoy, with mixed industrial sentiment and rising inflation expectations supporting a cautious CNB stance. A February rate cut is likely, but a pause beyond that is expected until the mid-year.