Daily digest market movers: Mexican Peso tumbles as economic data confirms slowdown
- Mexico’s Unemployment Rate increased to 2.9% in July as expected, but it was higher than the 2.8% from June. Seasonally-adjusted figures showed Jobless Rate was unchanged at 2.7%.
- Monday’s data in Mexico showed an improvement in Business Confidence, while business activity deteriorated further as measured by the S&P Global Manufacturing PMI.
- Most banks expect the Bank of Mexico (Banxico) to reduce rates by at least 50 basis points (bps) for the remainder of 2024. This would pressure the Mexican currency, which has already depreciated 15.38% year to date (YTD).
- ISM Manufacturing PMI in August came at 47.2, below estimates of 47.5 but above July’s 46.8. Meanwhile, the Employment sub-component index rose from 43.4 to 46.0.
- US Nonfarm Payrolls in August are expected to grow from 114K to 163K, while the Unemployment Rate is foreseen ticking lower from 4.3% to 4.2%.
- Data from the Chicago Board of Trade (CBOT) suggests the Fed will cut at least 96.5 basis points, according to the fed funds rate futures contract for December 2024.
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