The Day at a Glance | May 13 2024

The Top

*China’s annual consumer inflation stood at 0.3% in April, above the market´s expectation of 0.1%.

*Victoria Rodríguez, Governor of the Central Bank of Mexico, said that the possibility of resuming rate cuts will not be discarded in the bank´s next meeting, scheduled to take place on June 27th. 

*A Reuters survey revealed that Japan’s economy may have shrunk by 1.5% on a quarterly annualized basis.

*Oil prices rose this Monday after losing around $1 per barrel in the previous session amidst signs that US authorities will likely keep interest rates high for a longer period of time.

*US markets are up after the Dow Jones logged its best week so far this year. 

Economic environment

China’s annual consumer inflation stood at 0.3% in April, above the market expectation of 0.1%. By components, food prices logged a -2.7% y/y figure (prev. -2.7%), marking ten consecutive months of negative readings, while non-food items increased by 0.9% y/y (prev. 0.7%). Within non-food items, clothing increased by 1.6% (prev. 1.6%), housing by 0.2% (prev. 0.2%), health by 1.6% (prev. 1.5%), and education by 1.8% (prev. 1.8%). As for communication and transportation costs, these increased by 0.1% y/y due to some governments increasing public service costs such as natural gas and train fares. Additionally, core inflation, which excludes food and energy, increased by 0.7% y/y in April (prev. 0.6%). Furthermore, producer price inflation stood at -2.5% y/y (prev. -2.8%) for the nineteenth consecutive month. This is the third consecutive reading showing positive growth in China’s consumer prices, which alleviates some pressure on officials to provide more economic stimulus soon. However, deflation in producer prices suggests little forward cost pressure.

Markets and companies

US markets are up after the Dow Jones logged its best week so far this year. Additionally, investors await information on the Fed’s monetary policy with the April Consumer Price Index report expected for Wednesday. In Europe, markets are down. At 2:25 p.m. London time, the Stoxx 600 was down 0.2%, with most sectors in negative territory. Construction and materials stocks led losses, falling 0.9%, while automobile stocks rose 0.7%. On the other hand, Asian markets mostly fell as investors assessed inflation data from China and awaited the release of Japan’s GDP. As for commodities, oil prices are up this morning after losing around $1 per barrel in the previous session amidst signs that the Fed will likely keep interest rates high for a longer period of time (WTI $79.04 per barrel). Metals and cryptocurrencies are mixed, and in Mexico, the IPC is up (+0.18%) and stands at 57,819 points.

During the weekend, the exchange rate fluctuated between a minimum of 16.74 and a maximum of 16.79, currently trading at 16.74.

Corporate news

*Arm Holdings shares rose 3.4% after a Nikkei report indicated that the chip company is looking to launch its first artificial intelligence chips next year.

*Squarespace shares increased more than 12% after announcing a $6.9 billion deal to go private. The company said on Monday morning that it will be sold to the private equity firm Permira at $44 per share, a 15.2% premium from Friday’s close.