Daily digest market movers: Mexican Peso retreats as Fed officials push back against aggressive easing cycle
- Mexico’s Economic Activity in July expanded by 0.6% MoM, up from 0% in June. In the 12 months to July, ur grew 3.8%, crushing expectations of 1.8% and June’s -0.6% contraction.
- Retail Sales improved from -0.5% to 0.7% MoMy. They shrank -0.6% YoY, more than estimates of -0.5% but improved from -3.1%.
- Banxico is expected to lower borrowing costs by 175 bps, according to the swaps markets.
- US S&P Global Manufacturing PMI in September deteriorated further from 47.9 in August to 47.0, below forecasts of 48.5. Nevertheless, the Services PMI expanded by 55.4, above estimates of 55.3 but beneath the previous month's 55.7, hinting that the US economy is decelerating.
- Regional Fed presidents crossed the newswires. Minneapolis’ Neel Kashkari said the Fed remains data-dependent, that cutting 50 bps was “the right decision,” and projected the fed funds rate to end at 4.4% in 2024.
- Atlanta Fed’s Raphael Bostic commented that a half-point cut “does not lock in a cadence for future rate cuts,” while adding that risks to the labor market had increased.
- Chicago Fed’s Austan Goolsbee said many more rate cuts are needed next year.
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