Morning View

The Bank of England keeps its benchmark interest rate at 4%

International

Yesterday, the Bank of England held its monetary policy meeting. The Committee voted 5 to 4 in favor of keeping the interest rate at 4%, while the four dissenting votes were in favor of cutting the rate by 25 basis points. The statement highlights that the risk of high inflation persisting has become less pronounced and that, if disinflation continues, the path of rate cuts will also continue.

The main U.S. stock indexes fell yesterday. The S&P 500 lost 1.1%, while the Nasdaq fell 1.9% and the Dow Jones 0.8%. So far this year, the indexes have accumulated gains of 14.3%, 19.4%, and 10.3%, respectively.

At the same time, the US Treasury bond yield curve flattened. The 1-year bond closed with a yield of 3.64%, down from 3.70% previously, while the 3-year bond closed at 3.56%, down from 3.65% previously, and the 10-year bond yield fell to 4.08% from 4.16% on Wednesday.

Finally, both Chile and Mexico released their November inflation data. In Chile, inflation stood at +3.4% year-on-year, below the +3.7% projected by the consensus of analysts, while in Mexico the figure was +3.6% year-on-year, in line with projections.

Sources: PUENTE Hnos, Bloomberg

Private employment data exceeds estimates in the United States

International

Yesterday, the private agency ADP (Automatic Data Processing) published its October employment report, which indicates that 42,000 jobs were created during the month, above the 32,000 projected by analysts and the decline of 29,000 reported in September. On the other hand, the Purchasing Managers' Indices (PMIs) for October in the services sector, compiled by S&P Global and ISM, were also published. In the first case, the index stood at 54.8 points, above the expected 55.2, and in the second case at 52.4 points, above the expected 50.7. We recall that an index above 50 points implies expansion of activity, and below 50 points implies contraction.

The main US stock indices advanced yesterday. The S&P 500 gained +0.4%, while the Nasdaq advanced +0.6% and the Dow Jones +0.5%. So far this year, the indices have accumulated variations of +15.6%, +21.7% and +11.2%, respectively.

The US Treasury bond yield curve widened across the board. The 1-year bond closed with a yield of 3.70%, up from 3.66% on Tuesday, while the 3-year bond closed at 3.64%, also up from 3.58%, and the 10-year bond widened to 4.16% from 4.08%.

Finally, yesterday the Brazilian Central Bank held its monetary policy meeting, where it decided to maintain the benchmark interest rate at the current level of 15%. The committee noted that activity is slowing but the labor market remains dynamic, while inflation expectations stand at 4.5% for 2025 and 4.2% for 2026, above the target.

Sources: PUENTE Hnos, Bloomberg