Daily digest market movers: Mexican Peso weakens as reduction of rate differentials looms
- Mexico’s Retail Sales fell -0.6% MoM in January, missing estimates of 0.4% expansion but better than December’s data. Yearly figures plummeted from -0.2% to -0.8%, smashing projections for a 1.2% expansion.
- Mexico’s economic data released in the week:
- Aggregate Demand rose by 0.3% QoQ in Q4, up from 0%. On an annual basis, it decelerated from 2.7% to 2.6%.
- Private Spending on a quarterly basis slowed from 1.2% to 0.9%. On a yearly basis, it improved from 4.3% to 5.1%.
- The slowdown in Mexico’s economy is one of the main reasons that Banxico is eyeing the first cut. Mexico’s central bank expects the economy to grow 2.8% YoY in 2024, down from 3%, but maintains its 1.5% prior call for 2025.
- The US economic schedule revealed that Initial Jobless Claims for the week ending March 16 rose by 210K, below estimates of 215K and the prior week’s figures.
- S&P Global PMI figures for the United States were mixed, with Services and Composite PMI readings cooling but remaining in expansionary territory. The S&P Global Manufacturing PMI was the outlier, exceeding estimates of 51.7 and the previous reading of 52.2 by jumping to 52.5.
- Existing Home Sales rose by 9.5% from 4 million to 4.38 million.
- The latest inflation figures in the United States prompted investors to price in a less dovish stance. Money market futures have adjusted their rate cut expectations to be more in line with the Fed's as they foresee theFFR at 4.71% toward the end of the year. Analysts estimate the Fed will not change its FFR level until June or later.
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