Moderate Inflation and Improved U.S.-China Relations Boost U.S. Indices

The main North American indices closed the week with positive returns, driven by more moderate inflation data in the United States, along with signs of a possible improvement in the tense relations between the US and China. The yield on the 10-year Treasury bond fell 13 bps to 4.62%, reflecting an easing in risk perceptions. Meanwhile, the price of a barrel of WTI crude oil rose 1.85%, reaching $77.99. In parallel, volatility, as measured by the VIX Index, fell from 19.2 to 15.7, highlighting a reduction in market uncertainty.

The recent U.S. inflation report brought reassurance to investors after the concern generated by the strong employment figures released last week. Consumer prices rose by 0.4% in December, driven mainly by an increase in gasoline prices, while core inflation posted a more moderate 0.2% increase. On a year-on-year basis, CPI rose by 2.9%, up slightly from 2.7% in November. Core inflation, which excludes components such as food and energy, decreased to 3.2%, marking a decline from 3.3% in the previous month. A positive sign was the slowdown in the housing index, which rose 4.6%, its slowest pace in nearly three years.

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