The Day at a Glance | July 7 2021

The Top

*The FED will make its most recent meeting minutes public; markets will focus on any signs of a plan to withdraw stimuli.

*European Commission increased its growth estimates for the Eurozone in 2021 (4.8% vs 4.3% prev.); inflation was also revised upwards (1.9% vs 1.7% prev.).

*The US didn’t reach its goal of having 70% of its population receive the vaccine before July 4th; rural conservative regions resist getting vaccinated.

*Japan prepares new fiscal stimuli worth 180 billion dollars to boost its recovery.

*Mexico records its highest number of COVID-19 daily cases since February (7,989).

Economic environment

The FED will make its meeting minutes public. This afternoon (1:00 pm Mexico City time), markets will become aware of the discussions that were had within the Federal Reserve`s Open Market Committee in its last monetary policy meeting (June 15-16). In this decision, the FED surprised markets with a less accommodative stance regarding the permanence of monetary stimuli; it forecasted a rise in interest rates starting in 2023, recognized that discussions on the reduction of quantitative easing programs will begin, and showed greater concern regarding possible persistent inflationary pressures. The minutes will reveal details and arguments that led its members to shift towards monetary normalization after the pandemic. Markets will stay focused on the FED`s members stances regarding the withdrawal of the asset purchasing program: Signs about when they could start to withdraw it, and how fast they will decide to do so. Some members have said in recent public speeches that they could start to reduce bond purchases backed by mortgages as soon as the end of 2021. It will also be very relevant to understand the FED`s member`s thoughts on inflationary risks and the recent upsurge in prices; if most of them consider them to be significant and more persistent than expected, the FED could start to lean towards carrying out monetary normalization actions sooner rather than later.