The Day at a Glance | Aug 9 2022

The Top

*Inflation in Mexico slightly exceeded estimates during July (8.15%).

*Inflationary expectations receded in the US, according to a NY FED survey: 6.2% 1 year; 3.2% 3 years.

*FBI searched Trump´s Mar-a-Lago house looking for classified documents that the ex-president may have taken from the White House.

*Russia halts flow of crude oil to Hungary, Slovakia and the Czech Republic due to defaults – as a consequence of the imposed sanctions.

*Economic indicators: China´s inflationary figures are expected to be made public tonight (2.9%e.).

Economic environment

Inflation continues to rise in Mexico. The most recent figures made public by the INEGI confirmed an 8.15% annual increase in consumer prices during July, the highest level logged since 2000. Month to month, prices increased 0.74%, slightly above the estimated 0.72%. The largest increase came from the underlying component – especially commodities (0.72% monthly; 1.02% foods, beverages and tobacco). Services hiked 0.5% monthly and underlying inflation recorded a 0.62% monthly increase (vs 0.59%e.); and 7.65% annually. Agricultural goods also increased considerably by logging a 1.64% monthly increase, while energy related goods hiked 0.53%. The Central Bank of Mexico has estimated that the peak in inflation will be reached this quarter, although it’s constantly been delaying said expectation throughout 2022 as inflationary surprises have proven to be more persistent than originally expected. With this, Banxico is expected to increase the target rate in 75bp and take it to 8.5% and continue carrying out its restrictive cycle through which it seeks to halt the rise in underlying inflation, more than anything else.