The Day at a Glance | March 18 2022

The Top

*Biden holds talks with Xi Jinping; fears China’s tacit support for Russia.

*Russia avoids default; interests payment of bonds issued in dollars were sent to Citigroup.

*The Central Bank of Russian Federation keeps the interest rate at 20%, indicating an imminent economic contraction.

*The Bank of Japan committed to maintaining monetary stimulus even with inflation of 2%.

*The US fears nuclear threats from Russia if the war continues.

*Collection of the STPS (IEPS in Spanish) falls 56.3% in January due to the increase in the fiscal stimulus for gasoline in Mexico.

Economic environment

China-US conversations. This morning, US President Joe Biden will hold talks with Chinese President Xi Jinping to discuss the events in Ukraine. Bidens seeks to influence Russia to stop the invasion of Ukraine, through China; his intention is to convince Xi to align himself with Western goals. In addition, Biden is expected to state that China could be sanctioned if the Asian country decides to back Russia economically and militarily. The warning was already made earlier this week, in talks between the Secretaries of State of both countries. For now, China has denied receiving requests for help from Russia, reiterating that its priority is to stay out of the conflict and promote peace. Chinese Ambassador in the US, Qin Gang, said in a newspaper article that China would have stopped the invasion if it had been informed about Russia’s intentions and that actively seeks respect for the sovereignty of Ukraine and any other country. But he also said that using sanctions as a threat to forcé China to back Western plans is not the right strategy and will not work. China’s passive stance on the conflict has worried US officials, who have considered the inaction as a tacit endorsement of Moscow. Some have even suggested that Beijing has begun preparations to be sanctioned by the US and is implementing strategies to avoid an exacerbated impact; however, there is no evidence yet. The stance of China regarding the war will be key and the outcome of the talks will provide a clearer outlook on the likelihood of an end to the conflict.