The Day at a Glance | April 9 2024

The Top

*In Mexico, general inflation in March stood at 4.42%. 

*Business confidence among small American businesses fell to its lowest level in over 11 years in March amidst growing concerns about inflation. 

*Eurozone banks lowered the threshold for mortgage approval in the last quarter for the first time in over two years, but credit demand continued to decline amid high borrowing costs and a stagnant economy. 

*Bank of Japan Governor Kazuo Ueda said that the central bank should consider further reducing stimulus if inflation continues to accelerate, signaling the possibility of another interest rate hike later this year. 

*Gold prices reached a historic high for an eighth consecutive trading session due to geopolitical tensions. 

*Oil prices remain stable after decreasing as hopes for a ceasefire in the Middle East diminish.

*The United States began today´s trading session in positive territory. 

Economic environment

In Mexico, general inflation stood at 4.42% in March. Today, INEGI released the National Consumer Price Index for March, showing a 0.29% change, below the market estimate of 0.36% and our own estimate of 0.39%. Meanwhile, core inflation, which excludes the most volatile items such as energy, agricultural products, and government fees, increased by 0.44% in March, below the market´s forecast (0.51%e.). The statement highlighted an increase in chicken prices (+8.45%), however, this increase was more than offset by significant declines in onion (-19.89%) and tomato prices (-12.46%). On an annual basis, general and core inflation rates for March were 4.42% and 4.55%, respectively. Within the core component, the inflation rate for services stood at 5.37% in March of this year, lower than the 5.71% recorded a year ago. Within services, housing – the category with the highest weight in the index – stood at 3.78% in March (vs. 3.54% in February 2023), education (tuition fees) at 6.36% (vs. 4.88%), and other services at 6.46% (vs. 7.72%). Meanwhile, goods logged an inflation rate of 3.88%, composed of a 5.01% increase in food, beverages, and tobacco and a 2.53% hike in non-food goods. March´s inflation data reminds us that non-core inflation will continue to surprise us during the disinflationary process, especially since it is a very volatile category.

Markets and companies

Global markets with mixed sentiment. Main US indices closed the previous day with losses. This morning, markets started the day with mixed figures: Dow -0.07%, S&P +0.27%, and Nasdaq +0.31%. The yield on the 10-year Treasury bond fell to 4.37% (-4.81%). In Europe, markets are showing losses, with the Euro Stoxx down -0.40%. In Asia, markets closed in positive territory: Japan was up +1.08% as the country´s consumer confidence data was evaluated, while China was up +0.05%. In Mexico, the IPC is up, standing at $58,029 points (+0.07%). Oil prices logged a decline, after Israel reduced its military presence in Gaza, placing the price at $86.32 per barrel (-0.10%). Natural gas is up (+3.58%). Meanwhile, metals are up, with gold +0.80%, silver +1.2%, and copper +1.3%. Lastly, cryptocurrencies are down.

The exchange rate fluctuated during the early morning hours, reaching a minimum of 16.26 and a maximum of 16.35, currently trading at 16.33.

Corporate news

*Despite technology stocks in the United States recording declines in recent weeks, especially among semiconductor companies, UBS maintains an optimistic outlook on AI-related stocks.

*BP shares rose to their highest level since October after the oil company indicated it expected higher production in oil and gas exploration and production in the first quarter.

*Alphabet shares rose by 1.6%, reaching a new 52-week high, after unveiling a new custom Arm-based chip at its Cloud Next conference.