The Day at a Glance | January 12 2023

*Inflation in the United States continued decreasing in December and set at its lowest level in 14 months.

*New unemployment claims in the US surprised to the downside and set at 205 thousand, slightly above the previous week´s figure. Recurrent claims decreased to 1.63 million.

*The SHCP carried out its first auction of security assets in 2023.

*On Wednesday, the USMCA´s dispute settlement panel decided in favor of Canada and Mexico regarding the US interpretation of content rules for autos. Now, the US must decide how to apply the panel’s decision. 

*The European Central Bank made its economic bulletin regarding its December 15th monetary policy meeting known. The Governing Board considered i) the interest rate must still be increased considerably; ii) risks to growth are skewed downwards; and iii) risks to inflationary forecasts are skewed upwards.

*In China, consumer inflation accelerated slightly and logged a 1.8% figure in December (1.6% prev.). With this, average inflation in 2022 set at 2.0%, below the government´s 3% target. For its part, inflation for producers remained in negative territory and decreased more than expected by setting at -0.7% in the last month of the year.

Economic environment

General inflation in the US closed 2022 with a 6.5% annual figure, with which it links six consecutive decreases. The monthly rate logged a -0.1% figure due to a decrease in energy prices and goods (excluding food). In a disaggregate manner, the component that excludes food prices and energy logged a slowdown in its annual figures by dropping to 5.7%. However, in monthly and annual terms, both general and underlying inflation set in line with market estimates. Moreover, the recent inflationary figures could cause the FED´s Open Market Committee to consider a 25bp increase in its next meeting, which is scheduled to take place at the end of the month. 

The Mexican government exchanged debt securities in efforts to improve the country´s debt profile and provide the market with liquidity. The operation included the cancellation of debt through a repurchase of six M Bonds with maturities between 2023 and 2038 and two Udibonos with maturities from 2023 and 2025 for 41 billion pesos. The operation also included five M bonds with maturities between 2026 and 2053, respectively, for a total of 39 billion pesos. Both tenures that investors showed more willingness to re-sell are the M-Jun´23 and the M-Dec´23 with 24% and 30% of the amount repurchased. For its part, investors showed greater demand for the M-Jun´23 – the amount set above 15 billion pesos.