The Day at a Glance | May 27 2024

The Top

• INEGI announced that the unemployment rate stood at 2.5% in the first quarter of 2024.

• U.S. market are closed for Memorial Day.

• ECB officials said on Monday that there is room to cut interest rates as inflation slows, although they should take their time to ease monetary policy, even if the path forward is already clear.

• China’s net gold imports via Hong Kong fell 38% month-on-month in April, driven by a reduction in quotas by the People’s Bank of China to commercial banks to prevent currency depreciation.

• The Bank of Japan will proceed cautiously with inflation targets, Governor Kazuo Ueda said on Monday, noting that some challenges are exceptionally difficult for Japan after years of ultra-loose monetary policy.

• Oil rises in anticipation of inflation data after a negative week.

Economic Environment

INEGI announced that Mexico´s unemployment rate stood at 2.5% in the first quarter of 2024. According to figures from the National Occupation and Employment Survey (ENOE for its acronym in Spanish), during Q1 2024, the economically active population (EAP) was 60.7 million people, 59.1 million of which were employed and 1.5 million were actively seeking work, i.e., unemployed. Regarding the employed population, 32.1 million were working under some form of informal employment, such as without social security or in paid domestic work. This entailsthat 54.3% of the employed population was in informal employment, although there is disparity between states, with the highest being Oaxaca (81.1%), Guerrero (78.6%), Chiapas and Hidalgo (70.9% each), and the lowest being Coahuila (33.8%), Chihuahua (34.5%), Nuevo León (36.0%), and Baja California (37.4%). The unemployed population set at 2.5% of the EAP for Q1 2024, below the 2.7% recorded in Q1 2023. The ENOE figures show that the labor market remains very strong in our country, as theunemployment rate is set at historic lows and employment is growing. However, the high level of informality in our country and the obvious disparities between the north and the south are striking, as informal jobs also receive lower wages compared to formal ones.

Markets and Companies

U.S. markets are closed for Memorial Day. However, it’s worth noting that the Nasdaq closed last week at 16,920 points (+1.4% weekly), as gains from chip manufacturer Nvidia outweighed concerns that the Federal Reserve will delay interest rate cuts. The S&P 500 remained flat (0%), and the Dow fell by -2.3%. In Europe, moderate figures are observed, while UK markets are closed for the late May bank holiday. Key figures from the European Central Bank on Monday supported the possibility of an interest rate cut next week, indicating that this is practically a done deal. In Asia, markets are up at the start of the week. Industrial company profits in China increased during the first four months of the year, according to official data. Regarding commodities, oil prices are logging slight changes as markets await the OPEC´s June 2^nd meeting, in whichproducers are expected to discuss maintaining voluntary production cuts for the rest of the year. Metals are up, and cryptocurrencies are mixed. In Mexico, the IPC is up +0.16%, and stands at 55,500 points.

Over the weekend, the exchange rate fluctuated between a low of 16.67 and a high of 16.70, currently trading at 16.67.

Corporate News

• Intuit shares fell around 8% on Friday after issuing weaker-than-expected guidance for the fiscal fourth quarter.

• Ross Stores shares rose more than 7% on Friday after surpassing earnings expectations.