RUSSIA: Consumer Prices Rise +9.92% Y/Y in January

Some post-CPI core PCE estimates below - while not all had pre-CPI/PPI forecasts, it's pretty clear that CPI points to a slightly softer figure than seen coming into this week and certainly after PPI (pre-PPI it was around 0.20%, post-PPI it looked to be closer to 0.25%, now looks to be back to 0.20% or the high 0.10s%).

December Core PCE % M/M ests (0.11% prior):

• Wells Fargo 0.21%
• Nomura: 0.205% (had been 0.272% pre-CPI, post-PPI)
• HSBC: 0.2% (rounded)
• Cleveland Fed nowcast: 0.189% (had been 0.23% pre-PPI and pre-CPI)
• JPM 0.186%
• Morgan Stanley: 0.166%

The US Treasury Department has announced a raft of new sanctions on financial institutions determined to aid Russia in evading US-led sanctions or supporting Russia's military-industrial base. 

• The measures are part of a major push by the Biden administration to harden rules against Russia and China before President-elect Donald Trump takes office next week. Other measures announced include strict sanctions on Russia's energy sector and an expansion of export controls on semiconductors related to AI to China.
• A Treasury statement notes: "This action targets a sanctions evasion scheme established between actors in Russia and the People’s Republic of China (PRC) to facilitate cross-border payments for sensitive goods."
• The statement adds: "Today’s sanctions also include dozens of companies across multiple countries that continue to support Russia’s efforts to evade U.S. sanctions, particularly in the PRC, which remains the largest supplier of dual use items and enabler of sanctions evasion in support of Russia’s war effort." 
• Deputy Treasury Secretary Wally Adeyemo said in a statement: “Today’s actions frustrate the Kremlin’s ability to circumvent our sanctions and get access to the goods they need to build weapons for their war of choice in Ukraine. Today’s expansion of mandatory secondary sanctions will reduce Russia’s access to revenue and goods.”
• The Treasury Dept notes: "...foreign financial institutions that conduct or facilitate significant transactions or provide any service involving Russia’s military-industrial base... run the risk of being sanctioned by [Office of Foreign Assets Control]."

EURNOK is 0.5% lower today at 11.6650, just above initial support of 11.6627 (Jan 2 low). This level shields 11.6000, a notable pivot level going back to mid-2023, which closely coincides with the December 4 low (11.5998) and the 61.8% retracement of the June-August ’24 rally (11.5953). Positive risk sentiment following the softer-than-expected US CPI report has supported Scandi currencies this afternoon, with today's bid in crude oil futures providing an additional tailwind to the NOK.

• The weak krone was a key factor behind Norges Bank’s cautious stance through 2024, but strength since the December 19 decision keeps the base case of a March cut firmly intact.
• The median forecast of analysts tracked by MNI sees four Norges Bank cuts this year (i.e. once per quarter). This is a little more dovish than the December MPR rate path, which tilts in favour of three cuts.
• Statistics Norway’s Q4 business confidence survey is due tomorrow, the last datapoint ahead of Norges Bank’s January 23 decision. Rates are firmly expected to be kept on hold at that gathering, with last week’s CPI report not delivering enough of a downward surprise to shift consensus.