The Day at a Glance | December 14 2023

*Retail sales in the US positively surprised in November.

*The ECB kept its rates unchanged for the second consecutive meeting.

*The Bank of England stated that British interest rates should remain high for “an extended period of time.” 

*COP28 reaches an agreement to reduce fossil fuel consumption.

*Hungary’s Prime Minister, Viktor Orban, insisted that the EU shouldn’t begin discussions on Ukraine’s accession to the European block yet.

*Today at 1:00 pm Mexico City time, the Central Bank of Mexico will announce its last monetary policy decision of the year; we expect the statement to remain unchanged.

Economic environment

Retail sales in the US positively surprised in November and returned to positive territory. After a -0.2% m/m setback was logged in October, retail sales bounced back into positive territory. November´s reading exceeded market expectations by posting 0.3% m/m growth (-0.1% e.). Sales in food and beverage service stores recorded the fastest pace of growth (1.6%), followed by the sale of sporting goods, musical instruments, and books (1.3%). On the other hand, significant declines were recorded in gasoline sales (-2.9%), miscellaneous stores (-2.0%), and electronics stores (-1.1%). It´s worth noting that the change set at 0.6% m/m if the auto and gasoline sales categories are excluded. 

The ECB announced its decision to keep its rates at current levels for the second consecutive meeting. The ECB’s Governing Council´s members decided to keep key rates unchanged, as widely expected, and signaled an imminent end to their latest bond-buying plan. The ECB raised interest rates to record levels earlier this year, but unexpectedly, positive inflationary data in recent months virtually ruled out further policy tightening, shifting the debate towards the speed at which the decreasing rates cycle will be carried out. Attention will now focus on ECB President Christine Lagarde´s press conference, in which she is expected to moderate her position regarding previous guidance indicating that rates would remain unchanged for several quarters in order to achieve the 2% inflation target.