The Day at a Glance | December 13 2022

The Top

*Inflation in the United States slowed down more than expected (0.1% m/m; 7.1% y/y).

*The IMF agreed on a 3 billion dollar rescue plan for Ghana with the intention of stabilizing the economy and administering its debt.

*China plans to protest against the WTO because of US measures to restrict trade of technology and semiconductors.

*Industrial production in Mexico increased 0.4% during October (3.1% annual); it broke its two-month long streak of setbacks.

*Economic sentiment in Europe improved more than expected, according to ZEW survey (-23.6 vs -25.7e.).

*UN expects global trade to increase 12% this year and set at a record 32 trillion dollars, caused by energy prices.

*China delays economic reports and important economic policy meetings in light of Covid infections.

*Ukraine battles in the east against Russia while its allies prepare an aid plan for winter.

Economic environment

Inflation in the United States continues decreasing. Consumer prices continued decreasing in the United States and recorded a 0.1% monthly increase in November (vs 0.3%e.) – and a 7.1% annual rate (vs 7.3%e.). Core inflation was also lower than expected as it increased 0.2% monthly and 6% annual. Contractions were logged in energy (-1.6% monthly), commodities (-0.5%; used vehicles -2.9%), and transportation (-0.1%) and medical services (-0.7%). Nevertheless, a good part of these decreases were offset by price increases in food (0.5%) and services like housing (0.6%). Markets have reacted positively to the news as this confirms a downwards trend in inflation, which is necessary for the FED to meet expectations of pausing the increasing rates cycle at the beginning of 2023. Additionally, a faster than expected slowdown in prices confirms expectations of a 50bp increase in the Federal Reserve´s monetary policy meeting tomorrow; and even opens up the possibility of a less aggressive increase (25bp) in February´s meeting. However, persistent inflationary pressures in food and services along with wage pressures maintain uncertainty on the horizon.