The Day at a Glance | Jul 29 2022

The Top

*Mexico`s GDP increased 1% in the 2Q22 (1.9% annual), slightly above estimates.

*Inflation in Europe logged a new record in July – it set at 8.9% annual.

*Raphael Bostic (Atlanta FED) is convinced that the Federal Reserve still needs to increase interest rates to contain inflation.

*The Eurozone grew more than expected in the 2Q22 and logged a 0.7% quarterly expansion (0.4% annual).

*(PCE) inflation in the US increased slightly more than estimated during June (6.8% annual vs 6.6%e.).

*Biden and Xi agreed to meet in person after a call in which they discussed about climate change, production chains and food security.

Economic environment

Firm recovery in Mexico`s economy. Data made public by the INEGI this morning confirmed a 1% quarterly rate of expansion in the country`s Gross Domestic Product during the 2Q22. At an annual rate, growth set at 1.9% and the economy continued to log a firm rate of expansion after a good start in 2022. Tertiary activities (services and trade) were the ones that increased the most during the quarter (1%), but secondary (0.9%) and primary (0.9%) activities logged similar rates of expansion. In their annual comparison, the industrial sector increased the most (3.3%), followed by primary activities (1.4%) and tertiary activities (1%). The entire economy`s growth during the first semester set at 1.9%, but Mexico`s rate of growth is expected to face challenges as time moves forward: The US economy has started slowing down considerably, which could affect Mexico in the second half of 2022; while domestically, the economy could be impacted by high inflation and a restrictive monetary policy carried out by the central bank.