Note

Daily digest market movers: Mexican Peso on the defensive amidst political uncertainty

· Views 48


  • In February 2024, AMLO put forward several proposals to the Mexican Congress. These include a Supreme Court reform that suggests electing Supreme Court ministers through popular vote; an electoral reform aimed at electing electoral commission councilors by popular vote and reducing multi-member representation; and a reform of autonomous bodies that proposes dissolving the transparency body.
  • Mexican Peso depreciation could weigh on the Bank of Mexico's (Banxico) decision to ease policy, even though last month’s core inflation slowed. Therefore, keeping interest rates higher could prompt deceleration in the economy and increase odds of a recession.
  • Morgan Stanley noted that if Mexico’s upcoming government and Congress adopted an unorthodox agenda, it would undermine Mexican institutions and be bearish for the Mexican Peso, which could weaken to 19.20.
  • The US Bureau of Labor Statistics (BLS) reported that the Consumer Price Index (CPI) remained unchanged at 0% MoM, falling short of the 0.1% monthly estimate and April's 0.3% increase. Over the twelve months leading to May, the CPI rose by 3.3%, below both April's figure and the 3.4% consensus.
  • Core inflation figures decreased from 0.3% to 0.2% MoM. Annually, core inflation was 3.4%, which was lower than the expected 3.5% and April's 3.6%.
  • The latest US inflation report increased the odds for a Fed rate cut in September, according to the CME FedWatch Tool, from 46.7% to 61.3%.
  • December’s 2024 fed funds futures contract hints that investors expect 28 basis points of rate cuts by the Fed through the end of the year.


Disclaimer: The content above represents only the views of the author or guest. It does not represent any views or positions of FOLLOWME and does not mean that FOLLOWME agrees with its statement or description, nor does it constitute any investment advice. For all actions taken by visitors based on information provided by the FOLLOWME community, the community does not assume any form of liability unless otherwise expressly promised in writing.

FOLLOWME Trading Community Website: https://www.followme.com

If you like, reward to support.
avatar


Hot

No comment on record. Start new comment.