The day at a glance | January 5, 2022

El Día en Minutos
5 enero, 2022, 3 años ago
486

The Top

*The Federal Reserve`s December meeting minutes will be made public.

*Inflation in France stabilized during December (3.4% annual), a positive sign regarding prices in Europe.

*Manufacturing ISM in the United States (58.7) revealed an easing in inflationary pressures and positive signs among production chains during December.

*Consumer confidence in Mexico fell slightly during December (-1.5 to 44.5), but remains at pre-pandemic levels.

*China could have slowed down to its slowest level of growth since June of 2020 in the 4Q21: China Intl. Capital Corp.

*OPEC+ confirmed a 400 daily barrel increase in February`s production.

Economic environment

The Federal Reserve`s most recent meeting minutes. The Federal Reserve will make its most recent monetary policy meeting (Dec. 15^th) minutes public this afternoon, in which the central bank decided to speed up the withdrawal of the purchasing program. Investors will stay focused on discussions concerning the cycle of increasing interest rates in order to take into account the expected route of said rates with greater confidence – after members forecasted up to 3 25 base point increases in 2022. The purchasing program is expected to come to an end halfway through March and markets want to know if the rise in interest rates will happen after the program comes to a stop, or if it’s possible that the increase in rates could happen before the program `s end. Additionally, any mention about the bank`s balance will be greatly important, since it`s reached a worth of 8.8 trillion dollars after it aggressively acquired debt assets during the pandemic. Investors are looking for any signs about the FED`s intentions to start the balance`s decrease, which is believed to occur along with the rise in interest rates if inflationary pressures prevail. The balance`s reduction would imply a step towards less lax financial conditions as it involves a direct withdrawal in liquidity on behalf of the FED in debt markets. Lastly, the members` opinions regarding the Omicron variant`s effects on the economy will also be important, especially if they believe there could be inflationary or deflationary effects caused by the virus`s new variant.