The Day at a Glance | December 20 2022

The Top

*Retail sales rebounded 0.7% in October.

*Housing construction in the US continues to weaken.

*Mexico´s Federal Government informed of debt prepayment to multilateral agencies, including the Inter-American Development Bank (896 million pesos). 

*The People´s Bank of China left its 1 and 5-year loan rates set at 3.65% and 4.30%, respectively.

*Japan maintained its short term rate at -0.1%, and its 10-year rate at 0%. However, it announced that it widened the latter from 25bp to 50bp in both directions, causing the Yen to strengthen. 

*The Eurozone´s current account recorded a deficit worth -0.4 billion euros during October, less than the -8 billion euros logged the previous month.

Economic environment

Foreign trade. After two months of contraction, October´s retail sales logged a 0.7% monthly figure. With this, retail sales increased to 3.8% annual from September´s 3.3%. Online retail sales had the highest rate of growth (11.4% vs 4.4% in September), followed by clothing and footwear (9.4%). However, sales of food & beverage and hardware sales continued to decrease -1.9% and -2.7%, respectively. Lastly, by state, Zacatecas and Mexico City had the most important rates of growth in retail sales: 11.6% and 10.3%, respectively. Meanwhile, Veracruz logged a -5.4% annual contraction. 

USA. After a negative surprise was seen in the housing market index (NAHB Housing Market Index) in December – with a 31 point level (vs 34e. and 33 prev.), the worst since 2020 – construction of new houses set at 1.427 million in November (-0.5% monthly). Although this figure exceeded market expectations, it was the second lowest recorded since the summer of 2020. Moreover, private housing construction permits decreased 11.2% monthly and accounted for only 1.342 million permits, the lowest level since July of 2020. All in all, the figures seem to point out that the high level of indebtedness, along with inflation, have halted demand for housing. Tomorrow, MBA mortgage applications through December 16^th will be made known and will give a preview of December´s real-estate activity.