As the CBE unexpectedly eases, are more EM rate cuts on the horizon? Inflation in Egypt was still at a fairly high (albeit within target) 12.7% when the CBE cut rates last week. But below-target inflation may motivate other emerging-market central banks to do the same, Bloomberg writes. According to Morgan Stanley, inflation has fallen below 10-year averages in 80% of the emerging economies it covers, and as a result it expects 70% of them to either cut rates or keep them on hold. JPMorgan too has forecast easing in 10 emerging market countries, while Nomura Holdings has gone as far as to say that deflation may be a prospect for some economies.

Disinflation: What’s the situation? Slowing inflation (otherwise known as disinflation) is underway in key EMs. Both China and India’s January inflation data fell short of expectations, in both cases due to falling food and fuel prices. Add to this Citigroup’s latest Inflation Surprise Index for emerging markets — which fell to its lowest level in over three years last month — and it seems that disinflation is a growing trend among emerging economies (this is not true for all emerging markets of course — predictions of disinflation at the Turkish central bank would have you laughed out the room). While we have yet to see a comprehensive explanation, our somewhat cursory evaluation is that food and fuel prices are driving the disinflation trend.