Itaú BBA - Evening Edition - Commerce and construction confidences rise further in December

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Evening Edition - Commerce and construction confidences rise further in December

December 26, 2018

The confidence indicators’ performance in December solidifies the strong gains shown in the previous two months.

Talk of the Day

Brazil

According to FGV’s monthly commerce survey, business confidence in the sector reached 105.1 points in December (from 99.4 in November), the highest level since April 2013. The breakdown shows increases in both current conditions (+4.4%) and expectations (+6.6%). Construction confidence was also released, and reached 85.5 points in December (from 84.7 in November), driven by a rise in current conditions and expectations (both up 0.8%). For the consumer, confidence rose 0.6% mom/sa in December, solidifying the strong gains shown in the previous two months. The advance came from better current conditions (up 3.2%), while expectations decreased slightly (-0.8%), after rising 10.1% in November.

Supermarket real sales improved 1.4% mom/sa in November (our seasonal adjustment), according to ABRAS. In year-over-year terms, supermarket sales advanced 3.0%. Our preliminary forecast for November’s monthly survey of commerce (to be released on January 13th) is a 0.4% mom/sa gain in core retail sales and  a 0.2% increase in the broad segment (which includes vehicle and construction material). 

Tomorrow's agenda: December’s FGV business confidence survey on industry will be released tomorrow. The figures on the central government budget balance relative to November will also be published, for which we expect a BRL 12.6 bn primary deficit. Finally, the central bank credit report of November will be released during the day.

Argentina

Tomorrow’s agenda: The INDEC will publish the EMAE (official monthly GDP proxy) for October, for which we expect activity to post a drop of 0.9% mom/sa from September, leading to a 5.9% yoy contraction. The institute will also release the current account balance for 3Q18 on Thursday. We expect to see a decrease in the current account deficit in 3Q18 to USD 6.0 billion (USD 8.3 billion in the same quarter one year before) as a consequence of a weaker peso and lower internal demand. 

Colombia

Tomorrow’s agenda: the institute of statistics will release the unemployment rate for November, which we expect to come in at 9.7% (9.6% one year before), leading to 10.1% unemployment in the quarter (9.9% as one year before).



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