Daily digest market movers: Mexican Peso appreciates on Fed rate cut bets
- Mexico’s economic docket will be absent during the week, resuming on July 22, when the National Statistics Agency (INEGI) reveals growth figures for the month of May. Nevertheless, Bank of Mexico (Banxico) policymakers and political developments could rock the boat.
- Banxico’s Deputy Governor Omar Mejia Castelazo's recent comments on interest rates have sparked significant interest in the financial markets. Mejia, the sole dissenter in Banxico’s June 27 monetary policy decision, advocated for a quarter of a percentage rate cut, emphasizing the need for any rate adjustments to be gradual and not continuous, adding that further easing would not imply the beginning of a cycle of interest rate cuts.
- Mexico’s June inflation figures were higher than expected due to a rise in food prices when most economists expect Banxico to resume lowering interest rates.
- US Retail Sales in June were flat at 0% MoM, as expected. Core sales expanded by 0.4% MoM, above the 0.1% projected by the consensus.
- Export and Import Prices for the same period decreased, with the former dropping -0.5% MoM, below forecasts of -0.1%. Import prices rose compared to May’s -0.2% plunge and came at 0%, beneath estimates of 0.2% increase.
- June consumer inflation figures were lower than expected in the United States, increasing the chances that the Federal Reserve would lower borrowing costs in 2024 by at least 54 basis points, according to the December 2024 fed funds rate futures contract
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