Daily digest market movers: Mexican Peso appreciates ahead of busy schedule
- Last week, Banxico’s April poll showed that private economists estimate inflation to end the year at 4.2% in 2024, underlying prices at 4.1% and the economy to grow by 2.25%. Regarding the USD/MXN, analysts revised their projections downward from 18.10 to 17.
- Mexico’s economic calendar will feature the release of the Consumer Price Index (CPI) for April, estimated at 0.18% MoM, below March’s reading. In the twelve months to April, the CPI is foreseen climbing from 4.42% to 4.63%.
- Mexico’s Consumer Confidence in April was unchanged at 47.3.
- Auto Exports grew 14.4% YoY in April, crushing the previous reading of 4.9%. Automobile Production increased by 21.7% YoY, which was up from 12.8% in March.
- Softer than expected, US jobs data increased the odds that the Fed might lower rates during the year after Nonfarm Payrolls missed by adding just 175K people to the workforce in April, trailing March’s revised 315K figure.
- That data, along with Fed officials acknowledging that risks to achieving its dual mandate on employment and inflation “moved toward better balance over the past year,” signals that if labor market data is weak, that could pave the way for cutting rates.
- Data from the futures market see odds for a quarter percentage point Fed rate cut in September at 85%, versus 55% ahead of last week’s Federal Open Market Committee (FOMC) decision.
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