The Day at a Glance | April 26 2022

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*Mexico´s government will seek to reach an agreement with the private sector in order to halt the rise in prices among at least 25 products of the basic food basket.

*Retail sales in Mexico increased more than expected during February (0.8% m/m; 6.4% annual).

*In the United States, 4 out of 10 small businesses intend on increasing final sale prices in 10%: NFIB.

*Russian Foreign Minister Sergei Lavrov warned about a serious risk of a nuclear war with Ukraine; negotiations with Kyiv continue.

*Economic indicators: Consumer confidence figures will be made known (108e., 107.2 prev.).

Economic environment

Efforts to contain inflation. In an interview with Bloomberg, the President´s spokesperson, Jesus Ramírez, assured that the federal government will seek to reach an agreement with private companies in order to contain the increase in prices among basic goods. This is an effort to contain inflation, which has once again set at its highest levels in 20 years. The effort would focus on limiting the rise in prices among 25 goods in the basic food basket, even though it hasn’t been stipulated which products these would be. According to Bloomberg, government officials have held meetings with some of the country´s company leaders, and the agreement could be presented in the following days. This isn’t the only effort that Andrés Manuel López Obrador´s government is carrying out to contain inflation; last year, a limit was set on natural gas prices and the Ministry of Finance and Public Credit (SHCP for its initials in Spanish) subsidized fuel prices since 2022 in order to reduce the impact of higher international crude oil prices. Regarding the Central Bank of Mexico, forecasts continue to expect aggressive interest rate increases in order to contain inflation: Estimates expect a 50bp increase to be carried out in the bank´s following meeting scheduled to take place on May 12th – and the rate to exceed 8% by the end of 2022 and start of 2023