The Day at a Glance | Jun 10 2022

The Top

*Inflation in the United States surprised to the upside (8.6% annual vs 8.3%e.).

*Industrial production in Mexico increased more than expected after it logged a 0.6% monthly hike (2.7% annual) in April.

*Inflation in China increased less than expected during May (2.1% annual vs 2.2%e.).

*Drought affects several states in Mexico; it could increase bean, lime, corn and soy prices.

*Japanese authorities are concerned about the Yen`s depreciation; they are committed to intervene in the market in case it`s necessary.

*Franchised public transportation rates increase in one peso in Mexico City after demands were made by the transportation sector.

*Shanghai once again implemented confinements in light of increasing COVID-19 cases; it will carry out quarantine measures and mass testing during the weekend.

Economic environment

Inflation increased in the United States. The United States Consumer Price Index reached a new, 40 year all-time high increase: Prices hiked 1% during May and the annual rate of inflation set at 8.6% – figure above the 0.7% monthly and 8.3% annual estimated by analysts. Underlying inflation also increased more than expected (0.6% m/m vs 0.5%e.) and became more moderate to 6% annual with expectations of it decreasing to 5.9%. The rebound in inflation was mainly boosted by food (1.2% m/m) and energy (3.9%) prices, even though goods logged their highest monthly increase in 4 months (0.7%) in the underlying component. Services maintained a constant rate of growth among prices (0.6%) with respect to the previous 3 months. The increase in housing prices stands out (especially rent; 0.6% monthly), which is one of the index`s most important components. The figures confirm that inflation in the United States has not reached a peak and could force the FED to adopt an even more aggressive stance in order to guarantee that it doesn`t get out of hand.