The Day at a Glance | December 22 2022

The Top

*Inflation in Mexico once again increased (0.39%) during the first half of December.

*Annual GDP figures in the US confirmed firm progress in the 3Q22; growth was revised upwards.

*Sales of used houses in the US decreased for a tenth consecutive month; the figure set at 4.09 million.

*Consumer confidence in the US rebounded to its highest level in eight months; it set at 108.3 points in December.

*China´s government has reinstated rationing of medications as it faces a new wave of Covid-19 infections.

*Ukrainian President Volodymyr Zelensky thanked US support during his visit to Washington and called for more aid for his country and more severe sanctions for Moscow. For his part, President Putin announced a considerable investment of armed forces as the war continues.

*A severe storm system labeled “a once in a generation event” is impacting all of the US with record dropping temperatures. Three states have called for a state of emergency.

Economic environment

Inflation. In line with market expectations, inflation in Mexico rebounded during the first two weeks of December. It logged a 0.39% increase with respect to the previous biweekly period and a 0.10% rise. At an annual rate, inflation set at 7.77% – higher than the previous 7.45% figure – and remained under 8%. By component, the core inflation index, which excludes the most volatile components, logged a 0.57% biweekly increase (8.35% annual). Prices of goods showed less upwards pressures (0.62% biweekly and 11.08% annual), mainly because food and beverages, which increased 0.49% biweekly and 14.13% annual. For its part, the non-underlying component partly offset the previously mentioned increases and logged a biweekly -0.14% (6.08% annual); the figure is attributed to energy prices, which decreased -0.81% biweekly. However, prices of fruits and vegetables increased 0.74% biweekly, which contrasted with the negative variations logged in the same period in previous years and took the annual figure to 23.04%. Onwards, attention should be paid to food prices and a possible rebound in energy prices in light of an escalation in the war – along with a harsher than expected winter.