The Day at a Glance | December 9 2021

The Top

*Inflation in Mexico once again exceeded estimates and set at a 7.37% annual rate in November.

*Evergrande has officially defaulted on its debt, according to Fitch Ratings; Kaisa, a real-estate company has also defaulted after non-payment of 400 million dollars.

*Yi Gang, Governor of the People´s Bank of China, assured that the bank will not intervene in the default of real-estate companies in the country.

*Initial jobless claims decreased to 184 thousand in the United States in the last week; their lowest level since 1969.

*Inflation for consumers accelerated to a 2.4% annual rate in China during November, boosted by food prices; inflation for producers became more moderate (12.9% annual).

Economic environment

Inflation doesn’t show any signs of moderation. Figures made public by the INEGI showed a 1.14% monthly rate of growth in consumer prices during November in Mexico. This is the highest monthly rate of inflation since January of 2017, when gasoline prices increased up to 20% in light of the market´s liberalization as part of the Energy Reform. Annual inflation reached its highest level since January of 2001 and set at 7.37%. The rise came from the index´s most volatile components, with agricultural goods logging a 4.48% monthly increase (7.79% in fruits and vegetables), and energy prices increased 3.69% during the month. The rise in prices in the underlying index was the lowest in the last 7 months (0.37%) after a considerable moderation in the increase of commodity prices (0.37%), which is likely related to the Buen Fin season discounts; foods continued to log increases (0.52%). Services, for their part, logged a 0.43% monthly increase in prices (led by restaurants 0.74% and airfares 9.67%). The data confirms that the Central Bank of Mexico will need to carry out more of a restrictive monetary policy that avoids inflation from derailing from the bank´s expected trend.