The Day at a Glance | June 16 2023

*The New York FED´s activity index for service companies recorded its best reading in nine months. 

*The Bank of Japan maintained its short-term interest rate at -0.1% and the limit for the 10-year bond yield at 0%, despite upward surprises in growth and inflation.

*The INEGI´s timely indicator of private consumption forecasts 3.2% and 3.5% year on year expansions for domestic market consumption in April and May, respectively. 

*The final inflation reading for the Eurozone in May remained unchanged at 6.1% y/y for the overall index and 5.3% for the underlying component. 

Economic environment

New York leading indicators logged significant improvement in June. This Friday, the New York Federal Reserve published its service company activity index for June, which increased 11.6 points compared to the previous month´s reading and set at -5.2, its best reading since September 2022. Although the figure remained in negative territory, it points out an easing in the region´s services sector with a less pronounced decline. The category that marked this relative improvement is business climate, which recorded a -35.6 point level, compared to  the -45.8 point figure logged in May. Additionally, the six-month expectations indicator also reached its highest level in nine months, standing at 14.4 points (+4.3), also aided by an improved business climate (-5.7 vs -18.4 prev.). Although the business climate category – which has been a drag in the recent past – remains negative, it seems to be starting to normalize, particularly in future expectations. In this regard, it´s worth mentioning that these figures were preceded by a surprising rebound in the New York state´s manufacturing index – known as the Empire State Index, which increased 38.4 points to 6.6 in June, from a four-month low of -31.8 points recorded in May, mainly boosted by the shipments category (22.0 vs -16.4 prev.). Lastly, similar to the services index, it also showed an improvement in future expectations, rising to 18.9 points from 9.8 in May.