The Day at a Glance | March 6 2023

*Gross Fixed investment closed 2022 with significant acceleration. 

*Private consumption in Mexico increased 1.0% in December. 

*Retail sales in the Eurozone logged improvement in January, but remained below estimates. On a monthly basis, a 0.3% figure was logged (vs 0.6%e.) from a previous -2.7%, resulting in a -2.3% annual figure (vs -1.8%e.) – after December`s 2.8%. 

*The Services ISM Index in the US exceeded the consensus estimate and logged a 55.1 point figure in February – slightly lower than the previously recorded 55.2. 

*On Monday, Chief Economist of the ECB, Philip Lane, indicated that the central bank will likely raise interest rates in the following months. He added that the “calibration” of future hikes will depend on the ECB`s new economic forecasts, which will be made known next week. 

*Leader of the Russian private militia (Wagner Group), Yevgeny Prigozhin, warned that’s the lines surrounding the Ukrainian city of Bakhmut are at risk of losing if they don`t receive ammunition. 

*The Central Bank of Mexico will conduct a monetary regulation auction on Wednesday, March 8th. The securities to be auctioned include Cetes, with maturities ranging from 182 days to 700 days, as well as Bondes F, with maturities of 308, 665, and 1,680 days. 

Economic environment

In December, Gross Fixed Investment recorded a 2.7% monthly increase (in real terms). Boosted by both a favorable base comparison and an acceleration in investment towards the end of the year, the annual reading set at 10.3%. This performance was mainly increased by the machinery and equipment component, both in its monthly (3.1%) and annual (15.4%) figures. Within the component, national machinery and equipment logged a 7.3% monthly figure (25.0% annual), significantly higher than the growth recorded in imported equipment, with readings of 2.2% m/m and 11.5% y/y. However, it should be noted that the trend in transportation equipment had a similar performance in both national and imported equipment, increasing at annual rates of 38.7% and 34.8%, respectively. Regarding construction, a relatively more moderate increase (2.0% monthly, 5.8% annual) was logged – driven by the non-residential sector, which grew 13.6% annually, compensating for a -2.2% decline in residential construction. 

Private consumption rebounded in December. The last month of 2022 logged a 1.0% monthly increase – up from the -0.6% drop recorded in November. However, slow momentum prevailed throughout 2022. In disaggregate terms, the consumption of national goods increased by 1.2% monthly, supported by a 2.2% increase in services, while imported goods logged a 0.6% monthly figure. With this, on an annual basis, a 3.8% figure was logged – which is largely explained by the comparable base, and considering a marginal increase in the consumption of national goods (0.6%), offset by the 6.5% increase in services. Lastly, the consumption of imported goods increased 5.2% y/y.