The Day at a Glance | November 17 2021

The Top

*In 2022 inflationary pressures will prove to be temporary: Luis de Guindos, Vice-President of the ECB.

*Janet Yellen warns that the US Treasury Department could run out of resources on December 15.

*UK’s inflation reached its highest level in ten years (4.2%).

*Oil prices fall after talks between Xi and Biden, where the possibility of releasing strategic reserves was raised.

*Japanese exports grew at their lowest level in 8 months in October (9.4% annually), due to the shortage of semiconductors.

Economic environment

ECB firm in its expectation of temporary inflation. The European Central Bank remains firm in its expectation that most inflationary pressures will subside in 2022. According to the vice president of the organization, Luis de Guindos, the main factors that have caused inflation in recent months are clearly transitory, something that will become evident next year. He admitted that the expected slowdown in prices for 2022 might not be as fast as initially estimated by the ECB, but still expects to see inflation slowdown below the bank’s target (2.0%). Guindos’ comments come after a 4.1% annual inflation was announced in the Eurozone for the month of October, its highest level since 2008. De Guindos said that, in any case, the ECB must remain vigilant about wage negotiations as only substantial increases in wages could generate persistent inflationary pressures. Finally, the Vice President of the ECB dismissed market expectations of seeing an increase in the interest rate in October 2022, considering that it is very unlikely; although he said that the ECB’s decisions will depend on the evolution of inflation in the coming months.