The Day at a Glance | October 13 2021

The Top

*Inflation in the United States slightly surprised to the upside (5.4% annual).

*China`s exports exceeded estimates (28.1% annual) in September in light of firm global demand prior to end of the year festivities; imports slowed down (17.6%).

*U.S. House of Representatives approved the temporary measure to increase the debt ceiling.

*Argentina`s President assured an agreement with the IMF to restructure the country`s debt until 2022.

*United Kingdom prepares the withdrawal of stimuli implemented during the pandemic.

*Supply of credit in China drops after turbulence in the real estate market; long term credit for families dropped 26% in September.

Economic environment

Consumer prices accelerated slightly more than expected in the United States. The latest reading of consumer inflation in the U.S. set slightly above estimates by confirming a 0.4% monthly rate of acceleration during September (vs 0.3%e.) and setting at a 5.4% annual rate. Practically half of the rise was explained by food (0.9% monthly) and housing (0.4%) prices; while other lesser-weight components such as energy (1.3%) and commodities (0.2%) also logged increases. Nevertheless, underlying inflation practically set in line with estimates (0.2% monthly; 4% annual) and didn’t log annual acceleration with respect to the previous month. Initially, the data doesn’t seem to show clear signs of persistent inflation, or that it`s a widespread phenomenon; however, it also doesn’t allow us to categorically confirm its transience as housing prices are still rising and there are expectations of seeing new shocks because of the rise in energy prices. Figures in the following months will continue being greatly important to clear up the inflationary outlook as well as monetary policy towards 2022.

Chinese exports increased more than expected. Chinese exports logged an annual 28.1% rate of growth during September, figure above the consensus estimate of 21.5%. The positive surprise seems to have responded to firm global demand in light of end of the year festivities and an overall rise in prices, which offset electricity supply problems during the month. It`s estimated that the rise in prices could have contributed up to 5 percentage points to the rise in exports. Imports, for their part, increased less than expected (17.6% annual vs 20.9%) and showed the internal market that they are slowing down even more. Exports are expected to log slower rates of growth in the following months – once orders made due to end of the year festivities pass.