Daily digest market movers: Mexican Peso advances, shrugging off mixed US data
- Mexico’s Gross Fixed Investment figures in January came at 0.1% MoM, up from December’s 0%. In the twelve months to January, investment grew 15.3%, crushing December’s 13.4% increase.
- Last week, Banxico Governor Victoria Rodriguez Ceja remained dovish despite acknowledging that the battle against inflation hasn’t been won. She added, “When macroeconomic conditions and the inflationary outlook allow us to make additional adjustments to the reference rate to the one we already have, I consider that they would be gradual.”
- The ADP Employment Change in March was 184K, above the 148K foreseen by the consensus and February’s 155K.
- S&P Global revealed that the Services PMI came to 51.7, down from 52.3, while the Composite Index slowed from 52.5 to 52.1. The ISM revealed that Non-Manufacturing PMI was 51.4, down from 52.6 and lower than projections for a 52.7 expansion.
- On Tuesday, Cleveland Fed President Loretta Mester said that she doesn’t have enough information for a May meeting cut yet foresees three rate cuts in 2024. Mester added the Fed’s challenge would be balancing the risks between inflation and employment.
- San Francisco Fed President Mary Daly said the Fed needs to see how long to keep rates at current levels. She supports three rate cuts but added that it’s a projection, not a promise.
- Regarding future interest rate expectations of the Fed, the CME FedWatch Tool suggests that traders see a 57% chance of the US central bank cutting borrowing costs.
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