The Day at a Glance | January 18 2023

*Deputy Governor of the Central Bank of Mexico, Jonathan Heath, stated that he doesn’t expect the reference rate to exceed 11.5%.

*Inflation for producers became more moderate in the US in December; it logged a -0.5% figure.

*Retail sales in the US surprised to the downside with a -1.1% monthly setback.

*Mortgage applications in the US rebounded last week and surged 27.9% in the week ending January 13th, according to the Mortgage Bankers Association. This is a new high level since March 6th, 2020. 

*The New York FED`s business activity survey index continued decreasing and set at -21.4 points in January, its lowest level since February of 2021.

*Ukraine interior minister died in a helicopter crash outside of Kyiv. At least 14 other people died in the accident.

*This morning, US industrial production figures for December will be made known and are expected to decrease a monthly -0.1%.

Economic environment

Deputy Governor of the Central Bank of Mexico hinted at the reference rate approaching its terminal rate. Jonathan Heath stated in an interview that the terminal rate could set at between 10.75% and 11.5%, but that he doesn’t see it exceeding 11.5%, “in fact, not even way above 11.0%, but that will depend on data”. Additionally, the Deputy Governor mentioned the need to maintain a restrictive monetary stance for “the better part of the year” in order to ensure that inflation “continues decreasing”. The next monetary policy decision will be made on February 9^th; which is why the Governing Board will have January`s inflationary data available (they will be made known that same morning) – as well as the FED`s monetary policy decision, which will be carried out on February 1^st.