· The Mexican economy contracted (-) 18.9% during the 2Q20 – in line with estimates. The contraction was of (-) 10.5% annual in the first semester of 2020.
· The US economy contracted (-) 32.9% annually in the 2Q20, a record figure but still under the estimate.
· Jobless claims increase for the second consecutive week in the US, which is a sign of deterioration regarding a recovery in the labor market.
· The German economy contracted more than expected in the 2Q20: -11.7% vs -10.9% e.
· Signs of deflation in Europe: Germany -0.1% annual in July, Spain -0.6%.
· White House seeks to attract US businesses to Latin America to substitute production in Asia: Reuters.
· Economic indicators: China`s July PMIs are expected to show a solid expansion – they will be published tonight.
The Mexican economy contracted (-) 17.3% quarter over quarter in the 2Q20 and (-) 18.9% on an annual basis, according to INEGI data. The figures set in line with analysts` estimates and confirmed the greatest contraction in the Mexican economy`s history since the indicator`s existence. All sectors of the economy contracted during the quarter, with agriculture decreasing (-) 2.5% quarter over quarter (-0.3% annual), the industry contracted (-) 23.6% (-26% annual) and services set back (-) 14.5% (-15.6%). With this, the economy shrunk (-) 10.5% in the first semester of the year compared to the same period of 2019. Final figures are expected to be published on August 26th, once all of June`s data is accounted for. Up to now, data has shown a particularly focused recovery in exports and the industry, while consumption and investment have rebounded weakly.
The United States recorded a (-) 32.9% record annual contraction in the 2Q20 (vs -34.1%e.), with the deepest contractions recorded in consumption (-34.6%) and private investment (-49%). The contraction was a result of the virus`s economic impacts and a fast recovery is expected to occur in the following quarters; even though a lot will depend on the virus`s developments in the country. The only components that recorded a positive contribution to GDP were net exports and government spending. Consumption of services was the most impacted component by the pandemic (-43.5%). Recent data suggests that the recovery seen after May is starting to lose momentum, with 1.43M jobless claims the week ending July 25th (the second consecutive increase) and a rise of 1M people that receive aid for unemployment (17M total). High frequency indicators regarding mobility and consumption of services have stalled after a sensitive recovery in June and have remained way under pre-pandemic levels.