Daily digest market movers: Mexican Peso drops on high US yields
- Last week’s data showed that Mexico’s economic outlook is turning uncertain as the mid-month headline inflation for May rose while underlying prices dipped.
- Mexico’s economic slowdown, as shown by the last Gross Domestic Product (GDP) report and a widening trade deficit, could exert pressure on Mexican Peso.
- May’s Citibanamex poll showed that most economists estimate Banxico will cut rates on June 27 from 11% to 10.75%. The median expects headline inflation at 4.21% and core at 4.07% in 2024.
- Mexico’s schedule will feature the Unemployment Rate, the Fiscal Balance, Foreign Exchange Reserves, and the general election on June 2.
- The Richmond Fed Manufacturing Index rose by 13 in May, exceeding April’s -10 contraction. The Services Index for the same period improved from -13 to 3.
- May’s Dallas Fed Services Index plunged from -12.1 to -10.6.
- In the week ahead, the US economic docket will feature the second estimate of Gross Domestic Product (GDP) for Q1 2024, unemployment claims for the last week, and the release of core PCE.
- Despite that, fed funds rate futures estimate just 24 basis points of easing toward the end of the year.
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