The Day at a Glance | February 9 2023

*Inflation in Mexico increased slightly in January, as expected.

*In the US, wholesale inventories increased 0.1% annual in December, their lowest hike since June of 2020. However, sales became stagnant and logged null growth after November´s -1.4% setback due to a drop in sales of oil (-2.2%); when excluding this, the figure set at 0.4% monthly.

*Banxico will reveal its monetary policy decision at 1:00pm Mexico City time. The consensus expects a 25bp increase.

*Tonight, January´s producer and consumer inflation figures in China will be made known; forecasts expect -0.5% and 2.1% figures, respectively.

Economic environment

Inflation in Mexico set at 7.91% in January, in line with consensus estimates. This figure is a 0.09 pp increase with respect to December´s 7.82% figure. At a monthly rate, the consumer price index increased 0.68%, slightly above January´s average for the 2000-2022 period (0.68%). The underlying component´s monthly figure accelerated as it logged a 0.71% figure (0.65% prev.) due to persistent price pressures in goods (0.91%), especially among foods and beverages (1.25% monthly); while prices in services slightly increased 0.48%. Tuition fees  increased (which is normal at the beginning of the year) along with housing (0.47%). As for non-underlying inflation, a 0.57% monthly increase was recorded, significantly below January´s historical average (1.01%), although the figure compares negatively with December´s -0.4% reading because of livestock, energy prices, and government fees, which had all logged negative figures in December. At an annual rate, the underlying component seems to resist decreasing as it logged its sixth consecutive reading above 8.0% (8.45% in January) and has kept increasing. Non-underlying inflation logged a 6.32% figure, a second consecutive monthly hike. Overall, the most recent inflationary figures show persistent inflationary pressures. Today´s press release will provide greater clarity regarding the Governing Board´s outlook.

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