- Markets this week will be closely monitoring inflation figures for September from both Mexico (9/10) and the US (10/10). Market participants are also expected to focus on the minutes from the most recent monetary policy meetings of Banco de México and the Federal Reserve. Furthermore, anticipated announcements regarding the new president’s public policies regarding security and energy in Mexico could lead to increased volatility in local financial markets.
- With regards to local inflation, we anticipate a modest monthly increase of 0.07% in the Consumer Price Index (CPI) in September, which would translate into an annual rate of 4.6%.
- Banxico will release the minutes from its 26 September monetary policy meeting on Thursday (10/10). While most market participants anticipated this reduction, members’ voting patterns were surprising.
- In the political arena this week the Chamber of Deputies will discuss and potentially approve a constitutional reform initiative with the aim of transforming Petróleos Mexicanos (Pemex) and the Comisión Federal de Electricidad (CFE) from productive state-owned companies into public organisations.
- Regarding inflation projections in the US, the Fed of Cleveland nowcasts that core CPI could rise 0.27% MoM (3.11% YoY) and headline CPI 0.26% (2.25% YoY).
- Last week’s US employment report (4/10) triggered an upward adjustment in rates and some risk assets, mainly equity indexes, gained momentum as the report signalled that the US economy is stronger than previously anticipated.