EME Macro/Strategy: macro all-in-one (9-15 December)

For our final weekly of the year, we highlight the ECB’s dovish pivot during last week’s MPC meeting, highlighted by a 25bp rate cut, signalling potentially faster easing into 2025E. This comes alongside subdued macro projections and a shift in forward guidance that points to further accommodation. Inflation prints across the region presented mixed trends, with Romania and Poland reporting slight upticks. In Türkiye, the data releases painted a mixed picture: a fifth consecutive current account surplus underscores external improvements, yet weakening industrial production and retail momentum are consistent with a softer 4Q24E. The last Turkish MPC decision of the year, on 26 December, is seeing strong calls aligned for some initial easing. While this is possible, we believe it would be a mistake, and maintain our view of no change, with easing starting in 2025E. We also highlight political developments. In Romania, pro-EU parties advanced coalition talks, while resolving to field a single independent candidate for the postponed presidential elections in March 2025. In Georgia, Parliament elected Mikheil Kavelashvili as the new president. This week, all eyes are on the Fed meeting on Wednesday, when we expect a 25bp cut, followed by more of a pause signal.