The Day at a Glance | October 8 2020

The Top

· Inflation in Mexico slightly moderates to 4.01% annual.

· Pelosi and Mnuchin discuss plans to aid airlines to avoid layoffs; the discussion is independent from a new fiscal package.

· “There will come a time when government action will not be able to prevent increase in bankruptcies”: Agustin Carstens.

· Trump will not participate in the second presidential debate; he assures he will once again use tariffs against China as a negotiation tactic if he is reelected.

· FED will begin discussing its bond purchasing program in November, according to it September meeting minutes.

· The UK confirms it will abandon Brexit negotiations if no agreement is reached next week.

· Economic indicators: Initial jobless claims in the US are slowing down less than estimated (840k vs 820k e.).

Economic environment

INEGI published inflationary data for the month of September this morning, which shows a slight moderation in the increase of prices after 4 consecutive months of expansion. The Consumer Price Index increased 0.23% during September and set at 4.01% annual, a slight moderation with respect to August (4.05%). The figure set slightly below estimates. The largest contributor to growth was goods (0.42% monthly), while the underlying component (energy and agricultural goods) showed its first contraction since April (-0.04% monthly). Underlying inflation grew 0.32% and maintained itself at an annual rate of 3.99%, with the largest increases seen in clothing and footwear (0.79% monthly) and educational services (1.16%). Inflation is still within the upper part of Banxico`s target range, but at least it stabilized in September; even though data maintains expectations of not seeing anymore cuts in interest rates in Mexico – at least for the rest of 2020.