The Day at a Glance | November 9 2021

The Top

*Inflation in Mexico once again surprises to the upside (6.24% annual).

*Lael Brainard was interviewed as a candidate who could replace Jerome Powell as head of the FED in 2022 last week.

*FED warns that contagion in Chinese markets due to Evergrande could affect the United States if it deteriorates dramatically.

*Biden administration is considering presenting an infrastructure spending program at a global level in January of 2022.

*Chinese bond sales extend to businesses with investment grade, such as Tencent and banks.

*Evergrande must pay 148 million dollars to avoid default in dollar issued bonds this Wednesday

*Denmark and Singapore will impose restrictions in order to control the spread of Covid-19`s new wave.

Economic environment

Inflation continues to accelerate in Mexico. According to data made public by the INEGI this morning, inflation in Mexico logged a 0.84% increase in October, figure above the estimated (0.78%e.) level and set inflation at a 6.24% annual rate, its highest level since January of 2018. Underlying inflation also increased more than estimated, even though it did so by a small margin (0.49% vs 0.47%e.), and the annual rate continued to accelerate at 5.19%, its highest level since May of 2009. The largest contributors to the overall price index came from commodities and energy prices. Commodities logged a 0.6% monthly rise in prices, with the fastest acceleration seen in the non-food goods component (0.67%). Energy prices, for their part, logged a 4.59% monthly rise, boosted mainly by electricity prices (18.8%) as electric bill subsidies are coming to an end. Nevertheless, domestic LP gas prices also increased strongly (8.2%). Services recorded a 0.38% rise and agricultural goods barely increased 0.18% during the month. The data confirms that inflation continues to log an upwards trend and shows no signs of moderation, which could lead the Bank of Mexico to implement more of a restrictive monetary policy in the following months.