The Day at a Glance | November 23 2021

The Top

*Europe grew more than expected during November, but inflationary pressures and a new wave of the virus are clouding the horizon.

*Retail sales grew less than expected in Mexico during September (0.2% monthly; 5.9% annual; vs 0.8%e., 6.1%e.).

*Biden announced that 50 million barrels of crude oil reserves will be released in the U.S.

*China, India, Japan, the United Kingdom and South Korea join the United States in a coordinated action to release crude oil reserves.

*OPEC+ could modify its plans to increase crude oil production if the situation revolving around COVID-19 worsens, or if some countries decide to release reserves: IEF.

*Jerome Powell was nominated by President Biden to remain as head of the FED; Lael Brainard was nominated for Vice Chair.

*Members of the ECB advise continuing to withdraw monetary stimuli despite the new wave of the virus that affects the region.

Economic environment

Economic activity once again accelerates in Europe. According to leading PMI`s in the Eurozone, economic activity in the European block accelerated during November (Composite PMI 55.8), despite estimates forecasting a larger slowdown. The manufacturing sector logged marginal growth (58.6) and services logged a solid recovery (56.6) and contributed positive figures during November. However, the rebound could be short-lived as the virus`s new wave could affect the continent and force authorities to implement new confinement measures and worsen conditions among productive chains (which are already limiting growth). Additionally, issues with the supply of goods and energy costs continue to put upward pressures on prices as indicators have reached never before seen levels of acceleration and inflationary pressures have intensified. Because of this, growth during the 4Q21 is expected to be much more moderate compared to what was during the first three quarters. Sentiment among producers fell to its lowest level since January and risks that the Eurozone faces continues to suggest that the block will encounter important challenges in the short term.