MEXICO GDP KEY POINTS:Mexico’s second quarter GDP grows 1.5% q/q and 19.7% y/y, barely under market expectationsFinancial enlargement was pushed b
MEXICO GDP KEY POINTS:
- Mexico’s second quarter GDP grows 1.5% q/q and 19.7% y/y, barely under market expectations
- Financial enlargement was pushed by labor-intensive tertiary/companies sector
- Progress within the restoration may enable Banxico to boost charges once more within the coming months, however tightening plans will rely upon how the pandemic evolves
Most learn: US Greenback Searching for a Lifeline in PCE Inflation Information
The Mexican economic system expanded at a dynamic tempo within the April-June interval, because the nation continued to get better from the disaster induced by the coronavirus pandemic. In accordance with the Nationwide Institute of Statistics, Geography and Informatics (INEGI), gross home product within the second quarter grew by 1.5% in seasonally adjusted phrases (q/q) and by 19.7% in comparison with a 12 months earlier (y/y), bolstered by the labor-intensive tertiary/companies sectors. Economists had anticipated a 1.8% quarter-over-quarter and 19.8% year-over-year print. Whereas the annual determine is in line with a powerful rebound in home demand, you will need to observe that base results are accountable for the strong improve.
Supply: DailyFX Financial Calendar
Though knowledge got here barely under expectations, there isn’t a doubt the economic system continues to heal. This may occasionally enable Banxico to proceed elevating borrowing prices within the second half of the 12 months to comprise mounting inflationary pressures. Merchants presently count on about 100 foundation factors of tightening for the remainder of 2021, with ~20bps price improve priced for the August 12 assembly. Nevertheless, tightening plans may unravel rapidly if the brand new wave of COVID-19 dents confidence and weakens the restoration. That stated, if the well being disaster intensifies amid a surge in coronavirus instances, Banxico may stay on maintain for the subsequent few months till the pandemic subsides with the assistance of elevated vaccination ranges. Because of this, merchants ought to carefully monitor developments on the pandemic entrance within the coming weeks and whether or not new outbreaks result in mobility restrictions.
Again to right now’s knowledge, the outcomes didn’t set off any main strikes within the USD/MXN change price. Actually, on the time of this writing, the pair is buying and selling close to the flatline round 19.85. Nevertheless, worth may cost greater after the NY opening bell if threat aversion climbs amid U.S. fairness weak point. On the time of this writing, future contracts on the Nasdaq Index level to giant drop, dragged by important drop in Amazon’s shares after hours following its disappointing quarterly earnings outcomes.
USD/MXN 5 MINUTE CHART
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—Written by Diego Colman, DailyFX Market Strategist
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