The Day at a Glance | March 9 2022

The Top

*Inflation in Mexico rebounded slightly more than expected (7.28% annual, Feb.).

*Inflation in China set slightly above estimates (0.9% annual, Feb.); higher energy prices are a risk.

*Biden announced restrictions on crude oil, natural gas, and other energy products imported from Russia; the United Kingdom also implemented sanctions on Russia.

*Russia said that it will restrict the trade of some goods and raw materials as a response to Western sanctions.

*Volodymyr Zelensky, President of Ukraine, gives up joining NATO.

*Republicans and Democrats agreed on a 1.5 trillion dollar budget for 2022; the bill includes a point that stipulates a response to Russia`s invasion of Ukraine and the COVID-19 pandemic.

Economic environment

Inflation in Mexico. The most recent figures on consumer prices in Mexico showed a slightly faster than expected acceleration during February. General inflation logged a 0.83% increase (vs 0.8%e.) and set at a 7.28% annual rate; acceleration with respect to the previous month. Underlying inflation also accelerated slightly more than estimated after a 0.76% (vs 0.74%e.) increase was logged. Commodities were the main contributing factor to the increase in prices by logging a 0.96% hike (foods, beverages and tobacco 1.02%; non-food 0.91%). Energy related goods were the second most contributing factor to price increases in February, with a 1.74% monthly increase. Services also accelerated (0.52%) and logged their largest monthly increase since December, and the second largest in the last 12 months. For producers, inflation increased at a 1.42% monthly rate and set at 9.83% annual, the highest monthly figure for producers since March of 2021 and an acceleration with respect to January, which seems to be showing signs of moderation. The data suggests that inflation in the country could take a longer amount of time to decrease and will surely keep Mexico`s Central Bank in an aggressive restrictive monetary process in order to avoid prices from increasing persistently.