The Day at a Glance | January 21 2021

The Top

· ECB keeps monetary policy unchanged.

· It`s likely that PEMEX will require more government aid, which keeps the company as a risk for public finances: Fitch.

· Economic indicators: Jobless claims in the US slowed down to 900 thousand (920 thousand e.); unemployment in Mexico drops to 3.8%.

Economic environment

The European Central Bank had its first monetary policy of the year and decided to keep interest rates and asset purchasing programs unchanged. The ECB opted for maintaining monetary stimulus intact as the region`s economy has been affected by the virus`s fast spread during the winter. The bank considers that the recent 500 billion euro increase in the asset purchasing program (1.85 trillion in total) is enough to face the pandemic`s adverse effects – this will be maintained until March 2022. Meanwhile, the bank deposit rate was maintained at –0.5% and it considered that the long term loan program would be enough to maintain wide enough liquidity in the banking sector. President of the European Central Bank Christine Lagarde has shown confidence in that the region`s economic outlook will improve considering that a Brexit solution has been reached, a vaccine program has been underway in the 1Q21, fiscal stimuli has been approved in Europe and Joe Biden has taken office in the US. Lagarde is currently at a press conference in which she is expected to speak about the Euro`s relative strength – which has been observed in the last few months – and its impact on inflation and monetary policy decisions.

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