The Day at a Glance | December 20 2023

*Retail sales in Mexico positively surprised and suggest that consumption will close the last quarter of the year with strong momentum.

*British inflation plummeted in November to its lowest rate in over two years; investors are betting on the Bank of England carrying out cuts in the first half of 2024.

*The People’s Bank of China kept its 1 and 5-year interest rates unchanged at 3.45% and 4.20%, respectively. The decision was widely expected by the market consensus.

*Hamas leader visits Egypt amid intense talks about a new ceasefire.

Economic environment

In October, retail sales recorded 3.4% annual growth. This reading was well above the consensus-expected 2.0% y/y and the previous 2.3% y/y, indicating acceleration. Internally, two-thirds of the indicator’s components logged improvement, with notable growth in online sales, which exhibited a positive 15% y/y change. Additionally, significant progress was observed in the sales of self-service and department stores (12% y/y), followed by household goods and grocery sales (5.9% y/y), while motor vehicle sales fell by -4.4% y/y. This was accompanied by a decline in hardware sales (-1.4% y/y) and textile product sales (-2.5% y/y). On a monthly basis – and with seasonally adjusted figures – retail sales rebounded considerably, shifting from a September decline of -0.2% to a 0.8% rate of growth in October, surpassing the consensus estimate of remaining in contraction (-0.3% prev.). The monthly data broke a three-month streak of figures setting in negative territory. Retail sales figures suggest that consumption will close the last quarter of 2023 with strong momentum.