The Day at a Glance | Aug 18 2022

The Top

*The United States and Taiwan will begin negotiations for a trade agreement, challenging China´s opposition.

*Members of the FED consider moderating interest rate increases in its following meetings, according to the central bank´s meeting minutes.

*Mexico´s economy grew 1.5% annual in July, according to the IGAE.

*PACIC ineffective: 32 states in Mexico logged double digit inflation in 24 of the the basic basket goods.

*Inflation in Europe continues increasing after an annual 8.9% hike was recorded in July.

*Germany cuts its VAT on gas to reduce consumer price pressures.

*Local Chinese governments plan to issue 200 billion dollars in bonds for infrastructure investment that will back growth.

*ECB will continue increasing rates until inflation starts to slow down: Martins Kazaks, member of the ECB.

*China sold US Treasury bonds for a seventh consecutive month.

*Economic indicators: Existing home sales figures in the United States are expected to confirm a slowdown in the real-estate sector (4.89Me.).

Economic environment

US-Taiwan negotiations. The United States and Taiwan will begin formal negotiations for a trade and economic agreement soon, a sign of the US approaching and backing the island despite Chinese opposition. The first round of trade negotiations will start at the beginning of fall, according to a statement made by the US Trade Representative (USTR). The trade agreement ´s negotiations will include topics related to improving trade between both countries, regulation practices, anticorruption standards, broadening agricultural trade, among others. The agreement seeks to extend trade relations between both countries, based on shared values, according to a statement made by the USTR. Taiwan confirmed the start of the negotiations by assuring that it seeks to expand agricultural trade and back growth among small and medium sized local enterprises towards the US market – in addition to reinforcing international investor sentiment in the country. The negotiations confirm a step forward in US relations with Taiwan despite China´s threats, only a few weeks after Nancy Pelosi´s visit to Taipei. China responded immediately by assuring that it strongly opposes the initiative and warned the United States against signing an agreement as this would imply it acknowledging Taiwan´s sovereignty. China called on the US to manage its economic and trade relations with Taiwan carefully and respect China´s interests. Peking assured that it will resort to all necessary measures to safeguard its sovereignty and security. The initiative was originally announced by President Biden in May, but more concrete measures were taken yesterday.