What Jumps Out: Inflation Week

The weekend press here in Colombia was wholly lacking in local insight – instead concentrating on events overseas, ranging from the latest rich and famous Forbes list to Colombia’s highest ranked football players according to FIFA.

One subject that did get a mention was gasoline prices. From Saturday they rose by 200 pesos. Whilst prices vary from region to region due to local taxes etc., the average price across the country will rise by 2.17% to 9,380 pesos per liter. The Central Bank on Thursday stated that these initial modest increases of 200 pesos per month would not impact headline inflation. Remember, the aim of the finance minister is to remove over the coming years the US$ billions in subsidies that equate to ~2.5% GDP.

This is inflation week and September CPI is expected to be 0.78% (slowing slightly from 1.02% in August) with the 12m rate rising to 11.29%. The central bank comments on Thursday suggest we may have hit the highs already – Wednesday at 6am will tell us more.

Today the DANE will release the export number for September, the estimate of $4.6bn, seems extremely modest versus the $5.9bn in August. Also, today we have the latest PMI number from Davivienda.

On the markets, the Peso will remain a focus; it fell on Friday—number 137 of 140 currencies in terms of performance—after the Central Bank increased rates by only 1%, (to 10%) on Thursday. As per the world in general bad news is good news and visa-versa – this time the Central Bank says the slowdown has begun, but of course that indirectly impacts the Peso.

The COLCAP will continue to watch two events closely.

• The oil price, helped by OPEC rumors today, which will continue to whipsaw Ecopetrol’s stock price and given its index weighting that has an impact.
• The Grupo Nutresa tender approval – this will in all likelihood drive the price of GEA stocks up.

Wishing everyone a good week.

See link to video summary below (LinkedIn) :

https://www.linkedin.com/posts/rupert-stebbings-927b6316a_what-jumps-out-inflation-week-the-weekend-activity-6982670376900141057-fcht?utm_source=share&utm_medium=member_desktop

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That is about it for today – remember these are just themes that jump out at me – please refer to your local analyst, economist, salesperson or soothsayer for more details.

My regards to all,

Roops