Inflation Slows But Worries Remain

Good Morning,

Oil is near a five-month high. Overnight WTI futures were around $82 per barrel. The reason for high prices is due to tightening oil supplies, growing Chinese demand, lower U.S. inventory, lower Russian oil exports, and interrupted operations in Iraq.

U.S stocks ended the trading day yesterday higher as inflation and jobs reports came in lower than expected. This signals that the end may be in sight for the Fed’s tightening cycle. The Fed is also expecting a mild recession in the second half of 2023.

Canadian stocks ended higher, with the S&P/TSX hitting a 6-week high. The index was propped up by the gold mining sector. Yesterday the 10-year government bond hit a 4-week high of 2.981%.

Brazilian stocks ended the trading day lower as President Lula visits China. Biggest losers were BRF, Marfrig, and Totvs. Peru kept its key rate unchanged at 7.75%. Peru’s inflation rate dropped to 8.4% from 8.66% in March. In Paraguay the inflation rate dropped to 6.4% in March from 6.9%.

Markets: Before the Open

Top News Stories

Canada

• MTY Food Group Q1 profits were C$18.4M, profit was 75 cents per diluted share (BNN)

• Air Canada announces new CFO (BNN)

• Tilray buys rival Hexo for $229M (BNN)

• First Capital REIT to sell four properties for C$184M (BNN)

• After WestJet dropped flights of Halifax-Montreal prices of the route rose 69% (MG)

• Ford to invest $1.3B in its Oakville plant in Ontario, Canada to make EVs (CNBC)

• Hudbay minerals plans to buy Copper Mountain Mining for $439M (BNN)

U.S.

• GM ventures to invest $50M in lithium extraction startup EnergyX (CNBC)

• Walmart to close four Chicago stores (CNBC)

• U.S. inflation hits 5% in March, the lowest in 2 years (WSJ)

• IBM looks to sell its weather business, deal could be values at $1B (WSJ)

• The U.S. reported a $378B budget deficit in March (RT)

Argentina

• Oil firms extend 4% monthly price cap until August (BAT)

• Extended drought in Argentina is putting pressure on Argentina’s economy (BAT)

• Moody’s forecasts Argentina’s economy to shrink by 1.5% this year (BAT)

Brazil

• Brazil tries to attract China’s Cofco and others for investment towards degraded farmland (RT)

• Brazil’s haddad hints at rates cuts in the near future (RT)

• Brazilian beef exports dropped 8% in Q1 2023 (RIO)

• Vehicle production rose 20% year over year in March (RIO)

• Inflation slowed to 0.71% in March (RIO)

Colombia

• Colombian oil output expected to drop due to attacks on pipeline and civil unrest (PORT)

• Colombian coffee output dropped 13% in March (PORT)

• Autoparts sector is estimated to grow 40% this year (PORT)

• Viva & Ultra Air operations should be back online after growing through crises (ELT)

Costa Rica

• The World bank projects Costa Rica’s economy to grow 2.7% in 2023 (RE)

Chile

• Chile’s government approves bill to cut work week from 45 to 40 weeks (RT)

Dominican Republic

• Government debt rose $11.47B in 14 months, debt to GDP ratio is now 60.8% (ELD)

• Digital remittance processer WorldRemit drops fees by 47.31% for US-DR transfers (ELD)

• The government announced a spending cut of $803.65M, due to high debt levels (ELD)

Ecuador

• After 6 year Ecuador signs a trade deal with South Korea, top export is shrimp (RG)

Peru

• Ecommerce in Peru dropped 30% in 2022 (ELC)

Mexico

• Mexican airline Interjet announces bankruptcy (ELFC)

• German tech company to invest $43.2M to grow operations in Mexico (MB)

Venezuela

• Venezuela’s oil production grew 5% in Q1 (PORT)

Insights

Thank you for getting this far in the newsletter. If you have any feedback please reach out at any time. Don’t hesitate to refer your friends and colleagues to subscribe. The more subscribers mean

DISCLAIMER: The writing above is not financial advice or solicitation to buy/trade any financial product/security. This newsletter is for educational purposes only. Any action/decision made by any reader is done by their own accord. Financial markets are full of risk so please be careful.