The Day at a Glance | July 27 2020

The Top

· Mexican exports rise 75.57% in June.

· Republicans will present a fiscal proposal.

· Economic indicators: Mexico`s trade balance recorded its greatest surplus in history in June (USD $5,547M), while durable goods orders exceeded estimates in the US (7.3% monthly, June).

Economic environment

Mexican imports and exports show a strong recovery in June, once mitigation measures were lifted in the United States and Mexico. Exports showed a stronger recovery, with a 75.57% monthly expansion, mainly boosted by non-oil exports. At an annual rate, exports were still 12.8% below what was recorded in the same month of 2019, but were far from the low levels seen in April and May. Regarding imports, these grew at a monthly 22.24% and recorded a 22.2% annual contraction; the monthly increase was more limited in the importation of consumer goods (5.89%) and capital goods (5.05%), which suggests that consumption and investment remain weak. The stronger increase was recorded in the importation of intermediate goods (27.21%), which is a sign that the industry in Mexico is reactivating. With this, June recorded a balance of trade surplus of 5,547 million dollars; the largest amount in history.

The fiscal proposal is finally expected to be presented by Republicans in the United States today, in order to extend unemployment aid and the transfer of funds to American citizens in midst of the health emergency. According to statements made by White House officials and the Secretary of the Treasury Department, Steven Mnuchin, the plan will include transfers to citizens of up to $1,200 dollars in August, while unemployment aid will be reduced and will cover 70% of American citizens` pre-pandemic salaries in order to incentivize people to return to work. The plan will not exceed one trillion dollars and will work as a counteroffer, as the Democrats approved a 3.4 trillion dollar package in the House of Representatives; this will formally start discussions regarding a stimulus in Washington.