The Day at a Glance | October 11 2021

The Top

*Bank of England officials reinforce message of an imminent rise in interest rates in order to contain inflation.

*Inflationary risks must not be underestimated, nor the ECB`s ability to adjust its monetary policy: Klaas Knot, member of the ECB.

*Oil rally backs fears of inflation.

*Chinese developer company, Sinic, confirmed on Monday that it is unable to pay debt with maturity in 2021.

*Evergrande was unable to pay its dollar holders for a third consecutive week; Modern Land, its competitor, asks to extend its October payments.

*The number of international visitors in Mexico in the last 12 months has recovered 88.6%.

Economic environment

Central Banks worried in Europe. The Bank of England is one of the first to approach an increase in interest rates among advanced economies. According to recent comments made by its President, Andrew Bailey, the increase in inflation could significantly impact the economic recovery if the BoE doesn’t take action. Another member, Michael Saunders, assured that investors have made the right choice by taking into account an increase in interest rates; in fact, he suggested that the rise could be greater than expected. The comments confirm that the Bank of England could be the first to increase interest rates among advanced economies – estimates forecast that the cycle of increasing rates could begin in November or December. High prices of energy resources, disruptions among supply chains and increasing salaries have all led the ECB from believing that inflation is temporary. In the Netherlands, the central bank made its financial stability report public and warned that the inflationary process that we`re going through is quite uncertain. President of the Netherland`s Central Bank, Klaas Knot, considered that inflationary pressures could exceed the European Central Bank`s forecasts and cause vulnerability in the financial system, which has already considered too many risks in an environment of low interest rates and recovery from the pandemic. An abrupt process of monetary normalization in Europe would bring risks to the region`s financial stability. The most recent rally among energy commodities has reinforced the perception that inflationary pressures will be more problematic for central banks. Oil exceeded 81 dollars per barrel this morning.