The yield curve has flattened as mid- and long-term yields have moved up sharply “not because of inflation”; it probably has “something to do with stronger growth” and more recently with a more hawkish Fed.
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It still points to one more 25bp rate hike this year as the Fed is still not fully confident about inflation and feels it needs to strengthen market’s expectations about the need for “higher for longer” rates.
The strength of the economy and the job market will refrain the Fed from ruling out the chance of an additional rate hike this year. For now, the FOMC will skip and leave its options open.
GDP contracted 1.3% y/y in July. By productive sectors, the non-primary component contracted 1.8%, highlighting the decline in the construction sector and non-primary manufacturing. For its part, the primary component of GDP registered a growth…
In July 2023, the balance of traditional bank deposits (demand + time) registered a real annual growth rate of 1.5%, while the balance of the current credit portfolio granted by commercial banks to the non-financial private sector (NFPS) record…
Banks maintain levels of capital and liquidity above regulatory minima, along with higher profitability, even with a higher cost of risk. All the portfolios that make up bank credit to the non-financial private sector (NFPS) have registered growth in real terms.
GDP contracted 0.6% YoY in June. By productive sectors, the non-primary component of GDP contracted 0.8% in a context in which private spending indicators continue to suggest weakness. However, the primary component of GDP recorded moderate growth of 0.6%.
With the only change to the policy statement being a somewhat more upbeat assessment of the economic expansion pace, the door for an additional 25bp hike in September remains wide open, but another skip is more likely in our opinion.
Tomorrow’s policy statement and Powell's comments will likely remain hawkish to keep options open despite recent data pointing to cooling inflation. We will look for signals that challenge or support our baseline view that tomorrow’s hike will …
GDP contracted 1.4% y/y in May. Within the set of primary activities, the marked decline in the Fishing and Primary Manufacturing sectors stood out. On the other hand, the non-primary component of GDP also contracted in a context in which priva…
In May 2023, the balance of the current credit portfolio granted by commercial banks to the non-financial private sector increased at a real annual growth of 4.5% (11.2% nominal). Consumer credit contributed 2.5 pp, while the housing and business portfolios contributed 1.2 and 0.9 pp, respectively.
RMB to USD exchange rate has cumulatively depreciated by 8% in 2023, amid expectation change of the US FED hike path. Look forward, we predict RMB to go back to around 7-7.1 at end-2023 and 6.7 at end-2024.