The Day at a Glance | August 12 2024

The Top

• Tourism revenues continue reaching all-timehighs.

• In Mexico, the consumer confidence index stood at 46.9 points in July 2024, logging a monthly decrease of 0.4 points, according to seasonally adjusted figures.

• Chinese government bonds fell sharply on Monday after a turbulent week in which the central bank began to intervene heavily to curb a drop in long-term rates.

• Catherine Mann, an external member of the Bank of England’s Monetary Policy Committee, said that prices for goods and services will rise again and that wage pressures in the economy could take years to dissipate. 

• OPEC cut its forecast for global oil demand growth in 2024 on Monday, citing weaker expectations for China, a reduction that highlights the dilemma facing the OPEC+ group in general to increase production starting in October.

Economic Environment

Tourism revenues continue reaching all-time highs. In Mexico, net revenues from international travelers reached $12.719 billion for the January – June 2024 period, the highest ever recorded for a similar period since the series began in 1990. This is a 2.0% increase compared to the same period in 2023. Net revenues consist of foreign exchange earnings of $17.578 billion and expenses of $4.859 billion, which implies increases of 7.2% in earnings and 23.6% in expenses compared to the first six months of last year. These revenues are part of the tourism account in the balance of payments and contribute to the country’s surplus foreign exchange accounts. While tourism revenue figures continue to show strong fundamentals for the peso, recent events in international markets appear to be weighing more heavily on investor sentiment toward the Mexican currency.

Markets and Companies

US indices are logging marginal changes. Additionally, the market is preparing for key inflation data after nearly fully recovering from last week’s sharp decline. In Europe, stocks started the week with gains. The Stoxx 600 was up 0.1% at 1:55 p.m. London time, as investors look for signs that the recent market downturn has ended. In Asia, markets are mostly up after a volatile week. Hong Kong’s Hang Sengindex was up 0.13% in its final hour of trading. China’s CSI 300 finished the day down 0.17%, while Japan’s markets were closed for a holiday. Regarding commodities, oil prices remain stable. The risk of an escalation in the Israel-Palestine conflict continued to back prices after Iran and Hezbollah vowed retaliation for the killings of Hamas leader Ismail Haniyeh and Hezbollah military commander FuadShukr. Metals and cryptocurrencies are up. In Mexico, the IPC index is slightly up (+0.06%) and stands at 53,083 points. 

Over the weekend, the exchange rate fluctuated between a low of 18.80 and a high of 18.87, currently trading at 18.85.

Corporate News

• Shares of KeyCorp surged 18% following the announcement of a minority investment by The Bank of Nova Scotia. The deal gives Scotiabank 14.9% of KeyCorp’s common shares for approximately $2.8 billion in cash.

• JetBlue Airways shares fell nearly 6% after the airline announced plans to offer $400 million in senior convertible notes due in 2029.