The Day at a Glance | September 6 2023

*Retail sales in the Eurozone recorded a smaller than expected contraction in July, although they remained in negative territory for a tenth consecutive month. 

*Indicators in the North American real-estate sector have fallen to more than 25-year lows. 

*The US trade balance logged a smaller deficit than expected by the market. 

*Today at 12:00 PM (Mexico City time), the Beige Book will be published, which is a report on the current economic conditions in the 12 Federal Reserve districts. In Mexico, at 5:00 PM (Mexico City time), the National Council of Morena’s Committee will announce the party’s presidential candidate. Additionally, at 9:00 PM (Mexico City time), China will release trade balance data for August.

Economic environment

Retail sales in the Eurozone once again recorded a 1.0% y/y decline in July. July´s reading compared favorably to the -1.2% expected by analysts but still logged a negative figure for a tenth consecutive month. On a monthly basis, retail sales fell by -0.2%, down from June´s revised 0.2% m/m figure. There was a -1.2% decrease in vehicle sales, greater than the -0.3% in June, partially offset by a 0.5% m/m increase in the sales of non-food products. Overall, despite the uptick in the monthly readings in May and June, which have led to a moderation in the annual contractions, retail sales data in the Eurozone continues to be negative. This reflects lower real wages due to persistently high inflation, with a greater portion of income now being directed towards loans and mortgages.

The home purchase index calculated by the US Mortgage Bankers Association fell  -2.1% to 141.9 points, its lowest level since April 1995. Additionally, the mortgage application index dropped by -2.9% to its lowest level since December 1996. 

The US trade balance recorded a deficit worth -$65 billion, slightly lower than the market’s forecast of -$68 billion and down from the revised reading of -$63.7 billion in the previous month. Exports increased by 1.6%, while imports rose by 1.7%.