The Day at a Glance | June 22 2023

*Inflation in Mexico for the first half of June surprised positively. 

*US banks are pushing to soften regulatory proposals aimed at increasing capital requirements. 

*US employment claims remained high for a third consecutive week, potentially pointing towards a weakening labor market. 

*The Bank of England surprised by raising its interest rate by 50 basis points to 5% in order to control inflation. 

*At the Paris Summit, the World Bank unveiled new measures to assist countries affected by natural disasters, including debt payment “pauses”. 

*The Central Bank of Mexico will announce its monetary policy decision today at 1:00pm Mexico City time. 

Economic environment

General inflation set at 5.18% in the first half of June, below the expected 5.30% forecasted by analysts. On a biweekly basis, consumer prices logged a slight increase (0.02% vs 0.13% prev.). In disaggregate terms, underlying prices increased by 0.11% (vs 0.22% prev.), with a 0.08% increase in goods and 0.15% in services. On the non-underlying side, the figure set at -0.26% q/q, which is explained by declines in energy (-0.24%) and agricultural (-0.27%) prices. With this, on an annual basis, underlying inflation recorded a 6.91% figure (vs 7.03% prev.), while the non-underlying component increased by 0.03%. The positive surprise in inflation in the first half of June set in line with the stance taken by the central bank – that additional interest rate hikes will not be necessary as the country has entered a deflationary process. The Central Bank of Mexico will announce its June monetary policy decision at 1:00pm today.

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