The Day at a Glance | July 29 2020

The Top

· FED extends emergency programs to 2021.

· Economic indicators: US crude oil inventories are expected to show a moderate increase (0.375M e.).

· Amazon, Apple, Alphabet and Facebook executives will make an appearance before US Congress.

Economic environment

The Federal Open Market Committee of the US Federal Reserve will make a monetary policy decision today; no relevant changes are expected. Markets anticipate the central bank to maintain its extremely accommodative posture, with interest rates practically at zero and unlimited purchasing programs. The most important issue will be the bank`s perspective on the economy, as the situation has deteriorated since the bank`s last monetary policy meeting with a slowdown in recovery concerning the labor market and new outbreaks of the virus that threaten economic agents` confidence regarding a recovery. A decision is expected to be made by 1pm (Mexico), and a conference to be held by Chair Jerome Powell 30 minutes after. The statement is expected to reiterate the FED`s commitment to use all available tools in order to back the economy and mention current risks that threaten growth. Yesterday the FED announced that it would extend all emergency programs aimed at maintaining liquidity in markets until the end of 2020; despite the fact that markets have not shown great demand for extraordinary liquidity in recent weeks after the normalization of operations – a sign of a possible concern within the agency of risks in the second half of 2020.