Daily digest market movers: Mexican Peso on the offensive after soft US GDP data
- Mexico’s Unemployment Rate in April came as expected at 2.6%, up from 2.3% in March.
- The latest economic data from Mexico paint a mixed economic outlook. Although the economy continued to grow, higher prices and a widening trade deficit could depreciate the Mexican Peso.
- That and speculation of another Banxico rate cut in June could pave the way for further upside in the USD/MXN.
- 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.
- US economic docket featured the second estimate of Gross Domestic Product (GDP) for Q1 2024, which dipped from 3.4% to 1.3% QoQ, as analysts expected.
- Initial Jobless Claims for the week ending May 25 rose by 219K, exceeding the consensus 218K and the previous 216K reading.
- Despite that, fed funds rate futures estimated 27 basis points of easing toward the end of the year.
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