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

Last week, the EU approved a new sanctions package, banning LNG imports from Russia from January 2027 and tightening restrictions to close the loopholes that had allowed the evasion of previous measures. This move followed shortly after the US announced sanctions on two Russian oil producers and warned of penalties for entities engaging with them. US and China agreed on a framework to pause the tariffs ahead the Trump-XI meeting this week. In other news, the early business surveys for October signalled a constructive start to 4Q. On the monetary policy front, the MNB reaffirmed its protracted pause, while the CBT delivered a cautious cut. In the US, inflation continued to show a limited tariff impact, which has strengthened the case for a Fed rate cut this week, when combined with the data gap as a result of the government shutdown. The European Commission has approved Romania’s revised recovery plan, averting the potential loss of funds due to missed milestones. Lastly, the CBU has kept the policy rate unchanged, at 14.0%.