Daily digest market movers: Mexican Peso recovers ground amid weak US Dollar
- Mexico’s July mid-month inflation data could deter the Bank of Mexico (Banxico) from easing policy amid the risks of second-round effects, which, according to Goldman Sachs economists, could broaden to components of core inflation.
- According to Citi Research, analysts now estimate that annual inflation will end at 4.30%, up from the previous forecast of 4.20%, with core inflation expected to finish 2024 at 4.0%. Mexico's economic growth is projected to slow, with an expected growth rate of 1.9%, down from 2.0% in the last poll.
- The US PCE in June rose by 0.1% MoM and 2.5% YoY; both figures came as expected, with the latter falling from 2.6%.
- Core PCE expanded 0.2% MoM above estimates, and May’s figure, while on an annual basis, rose by 2.6% higher than forecasts, unchanged compared to the prior month’s reading.
- The University of Michigan Consumer Sentiment survey, on its final reading, jumped to 66.4, missed projections of 66.
- Inflation expectations for one year lowered from 3% to 2.9%, while for a five-year period they were unchanged at 3%.
- Data by the Chicago Board of Trade (CBOT) shows that traders are pricing in 55 basis points (bps) of easing towards the end of the year, as shown by the December 2024 fed funds rate futures contract
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