The Day at a Glance | August 13 2020

The Top

· Initial jobless claims slow down in the US (963k vs 1.11M e.).

· AIE cut its demand for crude oil estimates for 2019 and 2020.

· Banxico will settle on a monetary policy decision today (13hrs Mexico); the target rate is expected to be cut in 50 bp (4.5% e.)

· Economic indicators: Chinese growth data for July is expected to be published this evening (Fixed investment, -1.6% annual e.; Retail sales 0.1% e.; Industrial production 5.1% e.).

Economic environment

Initial jobless claims in the US recorded their lowest levels since March and set under one million for the first time in the last 5 months. Total jobless claims las week reached 963 thousand, figure below the 1.11 million expected by specialists. The total aid provided has also descended (ongoing claims 15.4M vs 15.9M e.), which is a sign of greater than expected resilience in the world`s largest economy. The figures suggest that the recovery in the labor market continues after a short pause in July when new COVID-19 outbreaks were recorded in the southern part of the country and slowed down the recovery`s momentum. The number of claims is still extraordinarily high compared to the levels seen before the pandemic (even compared to other recessions), which is why extending the government aid to unemployed citizens with a new fiscal package is still very necessary. There are still no signs of an agreement between Republicans and Democrats as no meetings have even been scheduled for new negotiations after it was announced that no agreements were reached last week. The lack of fiscal stimulus could diminish the recovery`s momentum in the following months, especially regarding consumption; and it could also increase non-payment of credits.