The Day at a Glance | September 23 2020

The Top

· Recovery in Europe continues to slow down in September; services contract.

· FDA will implement stricter controls for the approval of a COVID-19 vaccine, which reduces the likelihood of its distribution before November: Washington Post.

· US Congress approves government funding until December 11th; it seeks to materialize now with the fiscal package`s approval.

· Workers` income fell 5.5% monthly during July in Mexico; the contraction at an annual rate set at (-) 12.7%.

· Retail sales grew 5.5% monthly during July in Mexico; the contraction sets at (-) 12.7% at an annual rate.

Economic environment

The Europeans economy`s PMIs once again disappointed expectations during September and confirmed stagnation regarding the continent`s recovery. The leading economy`s activity indicator fell to 50.1 in September (vs 51.9 Aug), figure below the estimate (51.7), which suggests a greater slowdown in the economy at the end of the 3Q20. Manufacturing increased more than expected (53.7 vs 51.9) and maintained the economy afloat, whose services sector once again showed a contraction (49.1 vs 53 e.). The data shows that even though the recovery was strong after the economy`s reopening, growth in the medium term still faces important constraints. The contraction in the services sector shows the recent COVID-19 outbreaks negative effects in the region and could keep performing negatively as mitigation measures in European countries become more strict in the fall. Additionally, employment indicators linked 7 consecutive months of setbacks, which is a far from encouraging sign for the recovery in the long run. “The main concern at present is therefore whether the weakness of the September data will intensify into the fourth quarter, and result in a slide back into recession after a frustratingly brief rebound,” the IHS/Markit report said. United States PMIs will be made public around 9 am Mexico City time.