The Day at a Glance | July 13 2021

The Top

*Inflation in the US exceeded estimates in June.

*Imports and exports in China increased more than expected in June.

Economic environment

Inflation in the United States exceeded estimates. The most recent inflationary figures surprised markets by recording a 0.9% monthly rate of growth (vs 0.5% e.) and 5.4% annually (4.9% e.). Underlying inflation also recorded figures that set above estimates and set at 4.5% annual (4% e.) after a 0.9% monthly rate of growth (0.4% e.). The increase in prices practically recorded double the amount of growth that was expected during the month, even though the main rises were once again recorded in sectors related to the reopening, which continues to suggest that the rise is temporary. This rise was seen in products such as used vehicles (10.5% monthly), transportation services (1.5%), and energy (1.5%). The news brought some volatility to markets, even though inflation was expected to decrease throughout the month. More persistent inflation could accelerate monetary normalization in the United States.

Imports and exports in China surprised to the upside during June. Exports accelerated and recorded a 32.2% annual rate of growth in June, contrary to estimates that forecasted a 23% slowdown. Imports, for their part, also accelerated to 36.7% and exceeded estimates (29.5%) by slowing down less than expected. With this, China recorded a trade balance surplus worth 51.5 billion dollars, its largest since January. The data shows that global demand for Chinese goods such as cellular phones, refined oil products and shoes remains firm. The month had brought an upsurge in Covid-19 cases in the southern part of the country, which affected some ports and caused some delays in shipments. As for imports, figures suggest that the recovery has become more moderate in the domestic market, despite solid figures being recorded during the month. The Chinese customs administration expects the rate of growth in imports and exports to slowdown in the second half of 2021.