The Day at a Glance | April 9 2021

The Top

*ECB pressures EU member governments to approve the economic recovery fund in local legislatures.

*The Consumer Price Index in China recorded its largest increase since July 2018 (1.7% monthly; 4.4% annual); it reinforces fears of inflation at a global level.

*Industrial production in Mexico recorded a 0.4% rate of growth in February (-3.1% annual), boosted by mining and construction.

*The US adds 7 Chinese entities to the blacklist for assisting the Chinese army; they will lose access to US exports.

*Economic indicators: Figures on inflation for producers are expected to be made public in the US (2.7% annual e.).

Economic environment

The European Central Bank warned European countries that there would be grave consequences in the region`s economy if the fiscal package was not approved in local legislatures. After almost 8 months of leaders coming to an agreement on the 750 billion euro package for the region`s economic recovery after the pandemic`s impact, the package`s approval in local legislatures has seen no progress and resources have not been distributed. All member countries must ratify it in order for the resources to be distributed and many of them have delayed this part of the process. In Germany, a tribunal has temporarily suspended the law`s implementation. Members of the ECB consider it crucial to approve the European economic recovery`s fund in local legislatures of member countries for the entire region to recover from the pandemic. Isabel Schnabel, a member of the governing board, assured that the economic result would be disastrous if the economic package is delayed any longer. For other members of the ECB, the current situation – the funds approval occurring this month and its resources being distributed halfway through the year – already implies a risk to Europe`s recovery. The fact that Germany has indefinitely suspended the initiative has raised fears. The fiscal stimulus`s delay in Europe could reinforce the US`s improved relative performance, which may favor the dollar over the Euro in the following months.