LATAM: Week Ahead: Brazil, Mexico, Chile, Colombia CPI, Peru Rate Decision
Jan-03 17:42
- CPI inflation data for December will be released across the region next week, while on the monetary policy front a slight majority of analysts see the BCRP delivering a 25bp rate cut on Thursday. Elsewhere, the minutes for the BCCh and Banxico’s December monetary policy meetings will be published during the week, where both central banks delivered 25bp rate cuts.
- The BCCh will publish the minutes to its December monetary policy meeting on Monday. At that meeting, the central bank struck a more cautious tone, pointing to a potential pause at the January MPC meeting and a slower pace of rate cuts beyond that. Elsewhere, the BCB will publish its weekly Focus survey with attention on the continued deterioration in the inflation outlook. Datawise, Brazil services PMI and trade figures for December are due.
- On Tuesday, Chile’s trade surplus is expected to widen to $2.1bn in December, while November nominal wage figures will also cross. In Mexico, the latest Citi survey of economists is expected, while the BCRA will publish its analyst survey.
- Analysts expect Chile December CPI inflation to rebound to 4.7% y/y on Wednesday, while the BCCh will also publish its latest traders’ survey. In Brazil, industrial production growth is seen slowing to 1.8% y/y in November, while Argentina IP and construction activity numbers are also due.
- On Thursday, Mexico headline CPI inflation is set to fall to 4.2% y/y in December, while the core rate holds steady around 3.6%. Banxico will also release the minutes to its December MPC meeting when it cut rates by another 25bp, while in Peru the BCRP is seen delivering a 25bp cut to 4.75%. Elsewhere, Colombia CPI inflation is expected to slow further in December, while Brazil retail sales figures also cross.
- Brazil IPCA inflation takes the focus on Friday, with the headline rate forecast to remain steady at 4.86% y/y in December. Mexico IP is expected to fall by 1% y/y, while in Chile the BCCh releases its next economist survey.
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MNI EXCLUSIVE: Key Metrics For Assessing Any New French Budget
Dec-04 17:37
The EU has key metrics for assessing any new French budget, officials say. - On MNI Policy MainWire now, for more details please contact sales@marketnews.com
FOREX: Softer US Data Weighs on Greenback, AUD Remains Weaker Following GDP
Dec-04 17:37
- November's US ISM Services index saw its biggest drop since June, falling unexpectedly to a 3-month low 52.1 from 56.0. In sympathy, the USD index (-0.15%) immediately pared its prior advance and fell into negative territory on the session.
- Despite the US dollar turnaround, the Australian dollar remains the notable underperformer, following the softer-than-expected GDP data overnight and associated dovish repricing for the RBA.
- The trend condition in AUDUSD (-0.75%) remains bearish and today’s fresh cycle low reinforces current conditions. Note that moving average studies are in a bear-mode position too, highlighting a dominant downtrend. Scope is seen for a move towards 0.6350 (Aug 5 low) and 0.6339 (Nov 10 2023 low), a key area of support. Strength for the Euro has also seen EURAUD (+1.05%) extend higher towards 1.64, after firmly rejecting the brief slide below 1.6000 two weeks ago.
- JPY volatility continues to be the key feature of currency markets, with reports initially weighing on Wednesday. The potential political reaction to rate hikes is making senior Bank of Japan officials tend towards normalising policy more slowly, and this narrative assisted USDJPY to an impressive 1.75% recovery from the Tuesday lows (151.23 high print).
- However, the softer US data took the wind out of the pair’s sails and USDJPY spot is trading closer to 150.00 as we approach the APAC crossover.
- The drift higher in European equities alongside broader dollar weakness has supported the risk-sensitive Swedish krona today. USDSEK is down 1.00% ahead of tomorrow’s release of flash November CPI in Sweden. Elsewhere, US jobless claims will provide a warm-up to Friday’s NFP release.
OPTIONS: Larger FX Option Pipeline
Dec-04 17:34
- EUR/USD: Dec06 $1.0500(E2.0bln); Dec10 $1.0465(E1.3bln), $1.0500(E1.3bln), $1.0600(E1.1bln)
- USD/JPY: Dec09 Y152.50($1.0bln)
- USD/CNY: Dec10 Cny7.3000($1.0bln)
