Daily digest market movers: Mexican Peso soars, ignoring upbeat US economic data
- The National Statistics Agency (INEGI) revealed that Mexico’s Auto Exports decreased from 22.6% in January to 4.9% in March. Additionally, Automobile Production in March plunged to a -12.8% reading from a previous 7.8% expansion, fueled by the impact of higher interest rates set by the Bank of Mexico (Banxico).
- Banxico’s minutes highlighted that Deputy Governor Irene Espinosa dissented based on inflation expectations being above the central bank’s target. The central bank lowered rates by 25 bps in March to 11.00%. Despite that, the Governing Council stated that it would remain vigilant about inflation and remain data-dependent in upcoming meetings.
- The US Bureau of Labor Statistics announced March's Nonfarm Payrolls exceeded expectations, with a significant increase of 303K jobs compared to the anticipated 200K and the previous 270K.
- The Unemployment Rate decreased slightly to 3.8% from 3.9% with Average Hourly Earnings meeting consensus predictions.
- Following these figures, the US Dollar strengthened, evidenced by a 0.155% rise in the US Dollar Index (DXY) to 104.36. US Treasury bond yields increased by about 5 basis points, with the 10-year rate reaching 4.365%.
- Recently, Fed Governor Michelle Bowman stated that cutting rates too soon risks a rebound in inflation. She said that eventually, the bank would cut rates, yet inflationary risks are tilted to the upside. Earlier, Richmond Fed President Thomas Barkin described the NFP report as robust but noted that inflation's reduction has been inconsistent.
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