The Day at a Glance | May 27 2022

The Top

*A decrease in inflation was confirmed in the United States.

*Foreign direct investment logged a 20.29% annual rate of growth in the 1Q22 (19,427 million dollars), according to Banxico figures.

*19.1% of home sellers in the United States decreased prices in the last 4 weeks, the largest proportion since October 2019: Redfin.

*Taiwan and the United States will have conversation to strengthen economic cooperation, against Peking`s warnings.

*The European Union`s Summit, which starts on Monday, could be the next opportunity to approve an oil embargo on Russia.

*Chinese industrial companies` earnings receded during April (-8.5% m/m; -16.2% y/y), their worst setback since April of 2020.

*Tether issues “stablecoin” with a fixed exchange rate against the peso; it expects to participate in the remittances market.

Economic environment

Inflation in the United States became more moderate during April. Inflation in the United States – measured by the Personal Consumption Expenditure Deflator – became more moderate and logged a 6.3% annual rate in April (vs 6.6% March), according to figures made public by the Bureau of Economic Analysis. Month to month, inflation barely reached 0.2%, its slowest monthly increase in at least 7 months. The underlying component, for its part, logged a 0.3% monthly increase and slowed down to an annual 4.9%, with which it logged two consecutive months of a slowdown and reached its lowest levels since last year. The data suggests that the peak in inflation could have already passed, and starting now, it`ll be important for it to continue decreasing towards the 4.3% estimated by the FED towards the end of 2022, and to 2.5% in 2023. The Federal Reserve`s last meeting minutes confirmed that there will still be two 50bp interest rate increases in its monetary meetings scheduled to take place in June and July; but after this, adjustments will depend on inflation. Markets have started to speculate about the possibility of a pause in the FED`s increasing rates cycle towards September, and have started to take into account less aggressive increases; although the outlook remains uncertain. Other published data confirmed a 0.9% monthly rate of growth in personal consumption (0.7% real) despite a slowdown in revenue growth (0.4% m/m). This suggests that consumption remains strong, and is most likely being backed by credit.