The Day at a Glance | February 28 2023

*Inflation rebounded in France and Spain.

*Retail store inventories in the US logged a monthly 0.3% increase in January – above the expected 0.1% – although the figure was more moderate than the previous one (0.5%).

*The Federal Reserve of Dallas´s manufacturing activity index logged a decline (from -8.4 prev. to -13.5 points).

*Pending home sales in the US – those with a signed contract but the transaction has not become final – recorded a significant increase (8.1% m/m), the largest hike since July of 2020. 

*US Secretary of the Treasury, Janet Yellen, made a surprise visit to Ukrainian President Volodymyr Zelensky, to reaffirm the United States´ commitment to aid the country and announced the recent $1.25 billion dollar aid transfer. 

Economic environment

Preliminary inflationary figures in France and Spain surprised to the upside by logging a rebound in February. Considering “harmonized” figures – which are comparable due to their matching definitions – inflation in France accelerated from a 7.0% yearly rate in January to 7.2% in February, its new highest level since 1997. In Spain, inflation increased from 5.9% annual to 6.1% and linked its second consecutive rise. Forecasts expected both figures to decline – estimates were set at 7.0% and 5.7%, respectively. With these figures, the Eurozone´s aggregate inflationary estimate has now come into question (8.3% y/y), and will be made known on Thursday. In addition to the upwards surprise in Europe´s inflation, the ECB´s more aggressive narrative has recently come into play as it carried out a 50bp interest rate increase in February and expects to carry out another 50bp hike in March.

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