Mexico central bank flags upside inflation risks in minutes

08/16/18 Reuters

The Bank of Mexico logo is seen on the facade of an office building in downtown Mexico City

Mexico’s central bank flagged ongoing risks to the inflation outlook due to uncertainty over the NAFTA trade deal, pressure on the peso and the strength of the U.S. dollar, minutes from its latest monetary policy meeting showed on Thursday.

The Bank of Mexico’s board members voted unanimously to hold the benchmark rate unchanged at a more than nine-year high of 7.75 percent MXCBIR=ECI on Aug. 2.

Still, pressures on the peso currency due to higher external interest rates, dollar strength, and a potential escalation in commercial disputes stemming from U.S. trade policy all posed risks to the inflation outlook, the minutes showed.

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Mexico peso’s momentum from Obrador victory to last a while: Reuters poll

08/09/18 Reuters

pesoThe Mexican peso is likely to hold on to much of last month’s rally, the latest Reuters poll showed, underscoring investors’ newfound trust in newly elected President Andrés Manuel López Obrador’s economic credentials

The peso MXN=D2 is set to weaken 1.4 percent to 18.72 to the dollar in 12 months, according to the median of 19 forecasts of currency strategists and economists polled by Reuters.

That is still a stronger rate than the 19.00 per dollar consensus in last month’s poll, suggesting forecasters are convinced that the post-election rally was a structural change rather than a hiccup.

The peso jumped nearly 7 percent in July from over 20 to the dollar to around 18, boosted by Obrador’s assurance he would stick to an agenda of fiscal restraint and business-friendly policies.

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EMERGING MARKETS-Brazil stocks lead gains, NAFTA hopes boost Mexico

08/03/18 Reuters

Share market prices shown on anBrazilian stocks led gains in Latin America after state-controlled oil company Petróleo Brasileiro SA reported a larger-than-expected jump in quarterly net profit, while Mexico’s stocks and currency climbed on optimism about NAFTA negotiations.

Rising oil prices and diesel subsidies allowed Petrobras, as the Brazilian firm is known, to boost its market share. Also helping to lift sentiment were hopes that Brazilian Senator Ana Amélia Lemos could run as center-right presidential candidate Geraldo Alckmin’s running mate, after she said she was close to agreeing to do so late on Thursday.

Igor Lima, a partner at Galt Capital, said that could boost Alckmin’s clout among women as well as in Brazil’s southern region.

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Mexico’s central bank holds rates steady, trims growth outlook

08/03/2018 Reuters

The Bank of Mexico logo is seen on the facade of an office building in downtown Mexico City

Mexico’s central bank held its main interest rate steady on Thursday and trimmed its outlook for economic growth this year, as it vowed to maintain a “prudent” policy stance due to risks to inflation.

In its first policy decision since national elections last month, the Bank of Mexico board voted unanimously to leave its benchmark rate unchanged at a more than nine-year high of 7.75 percent MXCBIR=ECI, as expected in a Reuters poll.

The bank said risks to growth were tilted downward and that the economy would likely expand between 2 percent to 2.5 percent this year, compared to previous guidance of 2 percent to 3 percent.

“A few months ago, we thought that the growth would be greater,” Central Bank Governor Alejandro Diaz de Leon said on local radio on Thursday evening, adding that “the economic activity is starting to show a weakness that was not anticipated.”

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Mexico’s cenbank seen holding rates steady after peso surge

08/01/2018 Reuters

The Bank of Mexico logo is seen on the facade of an office building in downtown Mexico City

Mexico’s central bank is expected to leave its main interest rate stable on Thursday after a strong appreciation of the peso cooled inflation pressures and data showed a weakening economy.

In its first decision since national elections last month, the Bank of Mexico was seen holding its benchmark rate at an over nine-year high of 7.75 percentMXCBIR=ECI, according to 15 of 19 analysts polled by Reuters.

Mexico’s peso has gained around 12 percent since mid-June, just before the landslide victory of leftist Andres Manuel Lopez Obrador as president on July 1, buoyed by market friendly comments made by him and his team.

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Mexico economy dips in Q2 from previous quarter -preliminary data

07/31/2018 Reuters

pesoMexico’s economy shrank around 0.1 percent in seasonally adjusted terms during the second quarter from the previous three-month period, according to a preliminary estimate published by the national statistics agency on Tuesday.

Compared to the same quarter a year earlier, the economy grew by 2.7 percent in unadjusted terms, the agency said.

The Mexican peso fell immediately after the news, to 0.5 percent weaker against the U.S. dollar.

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Rally’s Not Over for Mexican Peso, Says $523 Billion Japan Fund

07/25/2018 Bloomberg

mexican pesosWhile emerging markets as a whole are challenged by global central bank stimulus withdrawal and trade tensions, Mexico offers value and Brazil looks attractive over a longer-term horizon, in the eyes of one asset manager at a Japanese fund giant.

Mexico’s growth faces limited risks as long as the U.S. expansion rolls on, according to Satoru Matsumoto, a fixed-income fund manager at Asset Management One Co., which oversees the equivalent of $523 billion. He said he added a position in the Mexican peso as the country’s election result unfolded this month.

Matsumoto isn’t counting on any big rallies, however. “Emerging currencies will be under downward pressure for the rest of the year,” thanks to the twin dangers of developed-world monetary policy normalization and trade tensions, he says. “You have to look for emerging-market assets that will remain resilient, rather then seek those that would go up.”

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