The Day at a Glance | September 13 2023

*Consumer inflation in the US increased more than expected during August. 

*In July, industrial production in the Eurozone logged its largest annual decrease since 2020. 

*This Wednesday, North Korea leader Kim Jong Un, and Russian President Vladimir Putin, will meet to discuss a possible arms deal that would be used against Ukraine. 

*In the US, the speaker of the House of Representatives stated that they are looking to open an impeachment investigation against US President Joe Biden, based on allegations that his son Hunter Biden directly benefited from trade agreements. A White House spokesperson commented that the evidence for the trial is “based on lies” and extreme politics at its worst. 

Economic environment

Inflation in the US accelerated for a second consecutive month and set at 3.7% annual. This reading set above the 3.6% expected by the analyst consensus – and the previous figures (3.0% and 3.2%) logged in June and July. The monthly reading remained in line with the market forecast of 0.6% and set above the previous 0.2%. August´s increase derived mainly from energy prices, which increased 5.6% m/m. For its part, underlying inflation logged 0.3% m/m and 4.3% y/y figures (4.7% y/y prev.). However, the annual reading for services – specifically housing and transportation – remained high by setting at 7.3% y/y and 10.3%, respectively. Overall, August´s reading doesn’t change the FED´s narrative; no interest rate hike will be carried out in this month´s meeting. 

Industrial production in the Eurozone logged an annual -2.2% setback in July, its second largest drop since June 2020 and greater than the -0.3% forecasted by analysts. With this, the negative streak in the monetary block´s industrial sector extended to five consecutive months. Similarly, the monthly reading also surprised to the downside by recording a -1.1% figure, which set below the -0.9% consensus estimate and broke the three-month positive streak of positive figures. On a disaggregate basis, energy production accelerated to 1.6% m/m, along with a rebound in the production of intermediate goods to 0.2% m/m, from -1.0% in June. However, the capital goods decreased -2.7% m/m. The Eurozone´s industrial sector kicked off the second half of 2023 with a negative tone, highlighting the poor performance in the manufacturing industry, which will most likely continue to “drag down” the entire sector.