Israel's central bank started its monetary easing cycle this week with a 25bp interest rate cut - a move that came a bit sooner than we'd expected. But inflation risks are greater than most anticipate, particularly from loose fiscal policy, which we think will result in a smaller easing cycle this year than is currently priced into financial markets.
Elsewhere, data released in Turkey this week showing that the goods trade deficit widened again in December suggests that the rebalancing process in the economy still has a lot further to go. We'll be discussing Turkey's policy shift and the macro outlook in an online briefing on Tuesday 9th January. Click here to register for the session.
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