Daily digest market movers Mexican Peso shrugs off Banxico’s dovish posture

INEGI revealed the Mexican Unemployment Rate in October dipped from 2.9% to 2.5% YoY, below the consensus of 2.9%.

INEGI reported that Gross Fixed Investment in September improved from -2.2% to -0.8% MoM. However, on an annual basis, investment plummeted by -3.3% from a 0.5% expansion and below estimates of 0%.

The latest Citi Mexico survey showed that most economists estimate Banxico will cut rates by 25 basis points at the December meeting. Analysts project the economy will grow 1.5% in 2024 and 1% in 2025.

The October JOLTS report showed that job vacancies came to 7.744 million, exceeding estimates of 7.48 million and September’s 7.372 million registered.

The CME FedWatch Tool suggests that investors see a 70% chance of a 25-basis-point (bps) rate cut at the Fed’s December meeting.

Data from the Chicago Board of Trade, via the December fed funds rate futures contract, shows investors estimate 17 bps of Fed easing by the end of 2024.

Banxico’s November survey shows that analysts estimate inflation at 4.42% in 2024 and 3.84% in 2025. Underlying inflation figures will remain at 3.69% in 2024 and 2025. GDP is forecasted at 1.55% and 1.23% for 2024 and 2025, respectively, and the USD/MXN exchange rate at 20.22 for the rest of the year and 20.71 in 2025.