The Day at a Glance | September 10 2024

The Top

• In China, exports are rising solidly, but the slowdown in imports darkens the trade outlook.

• Tonight, the US will host a presidential debate between Democratic candidate Kamala Harris and Republican candidate Donald Trump. It will be crucial to identify their proposals and see if they mention the trade relationship with Mexico.

• In August, German inflation fell to its lowest level in over three years, confirmed by a second estimate on Tuesday, making it easier for the ECB to cut interest rates this week.

• Brazil’s consumer inflation stood at 4.24% in August, below the consensus expectation of 4.29% and also down from the 4.50% observed in July. Futures now anticipate that Brazil´s Central Bank will cut the rate again in mid-September.

• Chile’s Central Bank will likely cut its interest rate by 25 basis points in October, bringing it to 5.25%.

• On Tuesday, OPEC lowered its forecast for global oil demand growth in 2024. It also cut its expectations for next year, marking the group’s second consecutive downward revision.

Economic Environment

In China, exports are rising solidly, but the slowdown in imports darkens the trade outlook. August´s exports recorded an 8.7% y/y increase (7.0% prev.), exceeding the consensus expectation of 6.7% y/y. This marks five consecutive months of growth in exports, and the fastestpace since March 2023. On the other hand, imports slowed significantly with a slight 0.7% y/y increase, falling veryshort of the consensus expectation of 2.3% y/y after a 7.2% rise was logged in July. Overall, in August, China’s exports increased at their fastest rate in nearly a year and a half, suggesting that factories are rushing orders ahead of expected tariffs imposed by an increasing number of trade partners, while imports disappointed amidst weak domestic demand. Thus, the mixed trade data highlights the challenge Beijing faces as officials try to boost economic growth without relying too heavily on exports.

Markets and Companies

The S&P 500 and Nasdaq started trading with positive figures, driven by a rebound in tech sector stocks after last week’s declines. The market has digested the latest employment data, which suggests a slowdown in the growth rate. This supports the expectation that the Federal Reserve may announce an interest rate cut in its September 17^th-18^thmeeting; tomorrow’s consumer inflation data will be important. Politically, markets will focus on today’s presidential debate between Kamala Harris and Donald Trump.

In the debt market, Treasury bond yields logged slight declines, with the 10-year bond trading at 3.70% and the 2-year bond at 3.66%. The market is pricing in a 25-basis-point rate cut by the Fed in its upcoming meeting.

In commodities, oil prices are declining after OPEC lowered its sales forecast for 2024 due to weaker demand in China.

In Mexico, the IPC is up and is trading at 51,268.0 points.

As for the peso-dollar exchange rate, it´s trading at 20.08 after closing at 19.88 yesterday.

Corporate News

• European Union authorities have determined that Apple must pay $14.4 billion in taxes, following a ruling that the tax benefits the company received in Ireland were not legally justified.

• Oracle shares rose nearly 8% after reporting better-than-expected quarterly results.

• Hewlett Packard Enterprise announced plans to issue Series C shares worth $1.35 billion to raise funds for the acquisition of Juniper Networks.