The Day at a Glance | June 17 2024

The Top

• China´s economy maintains its steady recovery with stable performance in May.

• The Central Bank of China left its one-year monetary policy rate unchanged at 2.5%, as expected by the consensus.

• The ECB is paying close attention to the proper functioning of financial markets, said ECB President Christine Lagarde on Monday, after French President Emmanuel Macron’s call for an early parliamentary vote last week scared investors.

• Makoto Sakurai, former board member of the Bank of Japan, said it´s likely that the central bank will reduce bond purchases by about 24 trillion yen ($152 billiondollars) per year but will refrain from raising interest rates at least until September.

• Oil rose on Monday due to expectations of greaterdemand in the northern hemisphere during summer.  

• Main US indices remain steady.

Economic Environment

China´s economy maintains its steady recovery with stable performance in May. Industrial production increased5.6% year-on-year in May, slightly below the consensus expectation of 6.0% year-on-year and the 6.7% logged in April. Manufacturing expanded by 6.0% annually, highlighted by a 10.0% rate of growth in technological manufacturing. On the other hand, retail sales increased by 3.7% year-on-year, above the market expectation of 3.0% and April´s 2.3% reading. In the January-May period, fixed investment, excluding rural assets, increased by 4.0% annually, slightly below the 4.2% expected by the consensus. Regarding investment, residential construction investment plummeted by -10.1%, and excluding it, fixed investment increased by 8.6%. May’s figures are encouraging for Chinese officials, as retail sales, which are directly linked to domestic demand, exceeded market expectations. However, the real estate sectors continued deterioration and the adverse global environment due to escalating trade tensions could worsen the outlook for the world’s second-largest economy.

Markets and Companies

Main US indices remain steady. Major US indices are logging slight changes today, after the S&P 500 and Nasdaqreached all-time highs last week, marking their seventh positive week in the last eight. In Europe, markets are recording mixed figures; they are awaiting the Bank of England’s policy rate decision on Thursday, with the Stoxx600 down at 1:50 p.m. London time. The automotive sector was up 0.79%, while utilities led losses, falling by 1.14%. In Asia, markets were mostly down as the region assessed key economic data from China. Regarding commodities, oil prices are up after posting their best week since April and breaking a three-week losing streak. Metals and cryptocurrencies are mixed, and in Mexico, the IPC is up +0.12%, and stands at 52,283 points.

Over the weekend, the exchange rate fluctuated between a low of 18.46 and a high of 18.58, currently trading at 18.57.

Terrafina Offers. Fibra Macquarie revised its acquisition proposal for Terrafina upwards, at an exchange ratio of 1.125 Fibra Macquarie certificates per Terra certificate. At Friday’s close, FIBRAMQ CBFIs closed at 30.12 pesos, while Terrafina certificates were at 36.87 pesos. On the other hand, it was announced on Friday that the TerrafinaAssembly did not approve Fibra Uno’s merger proposal.

Corporate News

• AMC Networks fell 10% after filing to sell $125 million in senior convertible notes due in 2029 in a private placement.

• Broadcom shares rose more than 3%, continuing their rise since Friday. The chipmaker’s shares have increased by 31% so far in June.