The Day at a Glance | August 12 2020

The Top

· Joe Biden choses Kamala Harris to be his running mate for the Presidency.

· The United Kingdom records the largest economic contraction in Europe: (-) 20.4% in 2Q20.

· China will pressure the US to discuss actions regarding Tiktok and WeChat in the commercial agreement`s revision on August 15th.

· The cost of transporting goods at a global level has increased 12% in 2020 and reached its highest level in five and a half years: Drewry World Container Index.

· Economic indicators: Industrial production contracted more than expected in Europe (-12.3% a., June. vs -11.5% e.); inflation in the US exceeds estimates (1% a. July vs 0.8% e.).

Economic environment

Democratic candidate for President Joe Biden has chosen Kamala Harris, Senator of California, to be Vice President in case he wins the electoral race. Both will hold their first event in Delaware today and will attend the Democratic National Convention next week to start a campaign towards November. Harris has defended proposals of a $15 dollar per hour minimum wage, was the only Senator of a State neighboring Mexico that rejected the USMCA and has proposed taxing Wall Street operations; in addition to calling for greater regulation regarding large tech companies. Her appointment has been interpreted in the Democratic party as a sign of unity amidst the electoral race and a strength against Trump.

Inflation in the US exceeded estimates during July as it increased 0.6% in the period and set at a 1% annual rate – its highest level since March. Gasolines once again were the increase`s main factor, with a rise of 5.6% during the month, partially offset by a 1.1% setback in foods. Underlying inflation also increased 0.6% during the period, its largest expansion since January 1991, and set at an annual 1.6%. All of the underlying index`s components recorded increases in July except medical goods, with the largest increases in used cars (2.3&) and clothing (1.1%). Despite the acceleration, inflation maintains itself at low levels due to the strong contraction in demand during the pandemic.