The Day at a Glance | February 27 2023

*Mexico`s trade balance logged a 4,125 million dollar deficit in January.

*Jonathan Heath, Deputy Governor of the Central Bank of Mexico, shared his point of view regarding the terminal rate and inflation for 2023.

*In the US, the University of Michigan`s consumer confidence index reached a one-year high of 67.0 points.

*US durable goods orders logged a monthly -4.5% decrease in January, its worst reading since April 2020 and contrasted with the 5.1% growth logged in December. The monthly performance is mainly attributed to a 4.5% drop in new orders. 

*China calls for peace and published a 12-point plan to end the military conflict between Russia and Ukraine.

Economic environment

Timely trade balance figures logged a -4,125 million dollar deficit in January. This figure was preceded by a 984 million dollar surplus in December, and with this, exports and imports logged a decline compared to the levels recorded in previous months; although, on an annual basis, they recorded double-digit growth. Exports set at 42.581 million (25.6% y/y), while imports set at 46.715 million (16.3% y/y).

In an interview with a national newspaper, Jonathan Heath stated that the national economy`s low financial penetration requires more forceful monetary policy actions. With this, he commented that in his personal opinion, the terminal rate will set in the range of 11.25%-11.75%, and that he doesn’t expect the interest rate to set below 10% by the end of the year. Regarding inflation, he stated that both general and underlying inflation will set slightly below 5.0% by the end of 2023.