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16 October 2017 MXN to Remain under Strain due to NAFTA and Political Risks (Publication Centre)

The Mexican peso and spreads have recently come under severe pressure. Last week, for instance, the MXN plummeted 2% against the USD to 18.9, the weakest level since May, as our first chart shows.

14 November 2017 Mexico's Manufacturing Remains Resilient, but NAFTA Risk is High (Publication Centre)

LatAm's economies are starting to expand at a relatively healthy pace, inflation is more or less under control and near-term growth prospects are positive.

11 November. 2016 Eyes of Hurricanes Pass, then the Real Uproar Begins (Publication Centre)

Uncertainty about the U.S. economic and political outlook, following Donald Trump's presidential win, likely will cast a long shadow over EM in general and LatAm in particular. On the campaign trail, Mr. Trump argued for tearing up NAFTA and building a border wall.

19 January 2018 The COP and MXN are Rising, but Domestic Politics are a Big Hurdle (Publication Centre)

NAFTA-related news has been mixed over the last few weeks.

27 March 2017 Mexico - Under Short-Term Inflation Pressures, and Hoping for Growth (Publication Centre)

The balance of risks to activity in Mexico this year is still tilted to the downside, even though recent data have been mixed. Key indicators show that the manufacturing sector is gathering strength on the back of lagged effect of the MXN's sell-off last year, and the improving U.S. economy.

27 January 2017 Will Mr. Trump Single out Germany for its Large Trade Surplus? (Publication Centre)

The uncertainty over the new U.S. administration's economic policies new is clouding the outlook for the Eurozone economy. The combination of loose fiscal policy and tight monetary policy in the U.S. should be positive for the euro area economy, in theory. It points to accelerating U.S. growth--at least in the near term--wider interest rate differentials and a stronger dollar. In a " traditional" global macroeconomic model, this policy mix would lead to a wider U.S. trade deficit, boosting Eurozone exports.

28 June 2017 Mexico's Trade Balance Stalled in May, but Trend Remains Positive (Publication Centre)

The upturn in Mexico's trade balance in recent months stalled in May, but the underlying trend is still improving. Data yesterday showed that the seasonally adjusted deficit rose to USD700M in May, after a USD15M gap in April. Imports rose 2.9% month-to-month, offsetting a mere 0.7% increase in exports.

28 September. 2016 The BCB's Report Takes a Big Step Towards Easier Money (Publication Centre)

The publication yesterday of the BCB's second quarterly inflation report under the new president, Ilan Golfajn, revealed that inflation is expected to hit the official target next year, for the first time since 2009. The inflation forecast for 2017 was lowered from 4.7% to 4.4%, just below the central bank's 4.5% target.

29 March 2017 Banxico to Hike Tomorrow Despite the MXN's Rebound this Year (Publication Centre)

LatAm currencies have risen against the USD so far this year, easing the upward pressure on imported good prices and allowing most central banks to cut interest rates. The first direct effects of stronger currencies should be felt by firms which import high-turnover intermediate or final goods.

27 January 2017 Trump's Plans Will Collide With Reality, But Mexico Will Suffer (Publication Centre)

U.S. President Trump on Wednesday signed an executive order aimed at delivering on his campaign pledge to build a wall on the U.S.-Mexico border. The executive order also includes measures to boost border patrol forces and increase the number of immigration enforcement officers. As previous U.S. presidents have discovered, however, signing an executive order is one thing and fulfilling it is something else. President Obama, for instance, signed an executive order to close the Guantanamo detention facility on his second day in office.

28 November. 2016 Banxico's Balancing Act is Becoming Harder and More Risky (Publication Centre)

Banxico's decisions throughout the past year have been guided by external forces, dominated by the persistent decline of the MXN against the USD and its potential impact on inflation. The MXN has fallen by almost 17% year-to-date and has dropped by an eye-watering 37% since 2014.

26 June 2017 Banxico's Hiking Cycle is Likely Over, While the BCB eyes a 100bp (Publication Centre)

Banxico raised its benchmark interest rate by another 25bp to 7.0% at last Thursday's policy meeting. This hike follows nine previous increases, totalling 375bp since December 2015, in order to put a lid on inflation expectations and actual inflation. Both have been lifted this year by the lagged effect of the MXN's weakness last year, the "gasolinazo", and the minimum wage increase in January.

24 November 2017 Risks to Mexico's Inflation Outlook are Increasing, but Q1 will be Better (Publication Centre)

The minutes of Banxico's November 9 policy meeting were released yesterday, in which the Bank left the reference rate unanimously unchanged at 7.0%.

24 January 2017 LatAm Currencies Enjoying a Moment of Calm, but Risks Remain (Publication Centre)

Most LatAm currencies traded higher against the USD yesterday, adding to the gains achieved after Donald Trump's inauguration last Friday. The MXN, which was the best performer during yesterday's session, was up about 0.8%; it was followed by the CLP, and the BRL. The positive performance of most LatAm currencies, especially the MXN, is related to positioning and technical factors.

25 April 2017 Mexico's IGAE Confirms a Surprisingly Firm Economy in Q1 (Publication Centre)

Economic activity in Mexico during the past few months has been stronger than most observers expected. Growth has certainly moderated from the relatively strong pace recorded during the second half of last year, but data for January and February show that it is still quite strong.

25 August 2017 Mexico's Mid-August Inflation Surprise is Nothing to Worry About (Publication Centre)

Mexico's inflation has been LatAm's odd one out over the last few years. In the decade through 2014, Mexico's inflation rate was broadly in sync with those of its regional fellows, as shown in our first chart.

26 May 2017 Mexican Consumption Will Slow as Tighter Financial Conditions Bite (Publication Centre)

Consumers' spending in Mexico was relatively resilient at the end of Q1, but we think it will slow in the second quarter. Data released this week showed that retail sales rose a strong-looking 6.1% year-over-year in March, well above market expectations, and up from 3.6% in February.

29 November 2017 Unemployment in Mexico Keeps Falling, but Risks Have Increased (Publication Centre)

Yesterday's October labour market data in Mexico showed that the adjusted unemployment rate rose a bit to 3.4%, from 3.3% in September.

26 September 2017 Brazil's Labor Market is on the Mend, But Challenges Persist (Publication Centre)

The Brazilian labour market is slowly healing following the severe recession of 2015-16. The latest employment data, released last week, showed that the economy added 35K net jobs in August, compared to a 34K loss in August 2016.

30 May 2017 BanRep Turns Cautious, but Expect Further Cuts as Activity will be Weak (Publication Centre)

BanRep cut Colombia's key interest rate by 25 basis points last Friday, to 6.25%. We were expecting a bolder cut, as economic activity has been under severe pressures in recent months.

7 June 2017 Sentiment Indicators Signal Better Times for the Mexican Economy (Publication Centre)

Mexico's survey data have improved significantly over the last few months, reaching levels last since before Donald Trump won the U.S. election in November. This suggest that the economy is in much better shape than feared earlier this year. Consumer confidence, for instance, has continued its recovery.

6 March 2017 Fed Fears Hit LatAm FX Last Week - is a Renewed Sell-off Coming? (Publication Centre)

LatAm assets have struggled in recent days as it has become clear that the Fed will hike next week. But we don't expect currencies to collapse, as domestic fundamentals are improving and the broader external outlook is relatively benign.

7 March 2017 Mexicans' Confidence Rebounds, Partly, but the Trend is Still Poor (Publication Centre)

Mexican asset prices and sentiment have been helped in recent weeks by less-harsh rhetoric from the Trump administration. The headline consumer confidence for February, reported yesterday, rose to 75.7 from 68.5 in January; all the sub-components improved. The data are not seasonally adjusted, so most local analysts look at the data in year-over-year terms.

8 August 2017 Will Mexico's Economy Resilience Continue in the Second Half? (Publication Centre)

The Mexican economy maintained its relatively strong momentum in Q2. The first estimate of Q2 GDP, released last week, confirmed that growth was resilient during the first half of this year, despite the confidence hit caused by domestic and external headwinds.

9 November. 2016 Trump Stuns LatAm... Banxico Likely Will Have to Act (Publication Centre)

As it became clear that Donald Trump would beat Hillary Clinton to win the U.S. presidency, EM currencies came under severe pressure, fearing his economic and immigration policies. Some of the initial pressure is easing as markets digest the news and following Mr. Trump's conciliatory tone in his victory speech. But the proposals have been made and the MXN and other key LatAm assets likely will remain very stressed in the near term.

8 November 2017 Mexico's Leading Indicators Remain Strong Despite Mixed Hard Data (Publication Centre)

Recent economic indicators in Mexico have been mixed, distorted by temporary factors, including the effect of the natural disasters in late Q3. Private consumption has lost some momentum, hit by the lagged effect of high interest rates and inflation, as well as the earthquakes.

6 March 2017 Yellen Effectively Promises a March Hike, with Good Reason (Publication Centre)

Fed Chair Yellen's speech Friday was remarkably blunt: "Indeed, at our meeting later this month, the Committee will evaluate whether employment and inflation are continuing to evolve in line with our expectations, in which case a further adjustment of the federal funds rate would likely be appropriate."

6 February 2017 Mexico's Sentiment Depressed by Trump Fears and "Gasolinazo" (Publication Centre)

Mexico's latest hard data suggest things might not be as bad as we feared. Retail sales and manufacturing output were relatively strong at the end of last year, the Q4 preliminary GDP report was mostly upbeat, and the labor market was firing on all cylinders.

31 March 2017 The Economic Outlook is Improving in Brazil, and even in Mexico (Publication Centre)

Downside risks to our growth forecast for Brazil and Mexico for this year have diminished this week. In Brazil, concerns over the potential impact of the meat scandal on the economy have diminished. Some key global customers, including Hong Kong, have in recent days eased restrictions on imports from Brazil, and other counties have ended their bans.

23 May 2017 The Mexican Economy Shrugged Off Trump in Q1, But Risks Remain (Publication Centre)

Yesterday's detailed Mexican GDP report confirmed that growth was resilient in Q1, despite external and domestic headwinds. GDP rose 0.7% quarter-on-quarter in Q1, in line with our expectation, but marginally above the first estimate, 0.6%.

31 October 2017 The Mexican Economy Remained Resilient in Q3, Despite Headwinds (Publication Centre)

Today's advance Q3 GDP report for Mexico will show that the economy performed relatively well at the start of the second half, despite external and domestic shocks.

4 April 2017 Mexican Markets Had a Good Q1, the Next Test is on the Political Front (Publication Centre)

LatAm, particularly Mexico, has dealt with Donald Trump's presidency better than expected thus far. Indeed, the MXN rose 10.7% against the USD in Q1, the stock market has recovered after its initial post-Trump plunge, and risk metrics have eased significantly.

5 January 2018 LatAm FX Started 2018 Strongly, but Risks Remain, Particularly in H1 (Publication Centre)

LatAm financial markets have performed solidly in the first sessions of the year, with most regional currencies trading more strongly against the USD.

4 October 2017 Survey Data Suggest Recoveries in Brazil and Mexico are on Track (Publication Centre)

The Brazilian economy has been recovering at a decent pace in recent months. The labor market is on the mend, with the unemploymen t rate falling rapidly to 12.5% in August from 14% at the end of Q1.

30 January 2017 Mexico's Trade Gap is Shrinking, but Medium-Term Outlook is Cloudy (Publication Centre)

Mexico's trade balance shrank slightly last year, to USD13B, from USD14.6B in 2015. An improvement in the non-energy deficit was the main driver, while the energy gap worsened.

23 August 2017 Mexican Economy was Firm in H1, H2 Will be Soft, but 2018 Better (Publication Centre)

Yesterday's detailed Mexican GDP report confirmed that growth was relatively resilient in Q2, despite the lagged effect of external and domestic headwinds.

13 November 2017 Banxico Will Monitor Market Dynamics as Risks Rise (Publication Centre)

Banxico decided unanimously to hold its benchmark interest rate at 7.0% at last Thursday's policy meeting.

13 December 2017 Mexico's Manufacturing Starts Q4 Badly, but it Will Gradually Improve (Publication Centre)

Mexican industrial activity started the fourth quarter badly. Industrial production fell 0.1% month- to-month in October, pushing the year-over-year rate slightly up to -1.1% from -1.2% in September and -0.7% in Q3.

13 October 2017 Brazilian Consumption is Picking Up, Despite August's Poor Data (Publication Centre)

Brazil's retail sales data undershot consensus in August, falling by 0.5% after four straight gains. But we think this merely a temporary softening, following the strong performance in recent months.

13 September 2017 Brazilian Consumers' Spending set to Keep Rising Steadily (Publication Centre)

Data released yesterday in Brazil are consistent with our view that private consumption will continue to drive the recovery over the second half, offsetting the ongoing weakness in private investment.

15 August 2017 Weak Q2 for Mexico's Industrial Activity, but What Happens in Q3? (Publication Centre)

Last week's industrial report confirmed that the Mexican economy softened at the end of the second quarter. Industrial production was unchanged year- over-year in June, calendar-and seasonally adjusted, down marginally from +0.1% in May.

14 March 2017 Commodity Prices won't Alter the Improving LatAm Picture (Publication Centre)

The medium-term outlook in most LatAm economies is improving, though economic activity is likely to remain anaemic in the near term. The gradual recovery in commodity prices is supporting resource economies, while the post-election surge in global stock prices has boosted confidence. But country-specific domestic considerations are equally relevant; the growth stories differ across the region.

12 December 2017 Banxico Likely Will Keep Rates on Hold, but Options Are Wide Open (Publication Centre)

November's inflation data in Mexico, showing a modest increase in the headline rate, have strengthened the case for further monetary tightening. But we stick to our long-standing view that the Board will leave rates at 7.0% on Thursday.

12 April 2017 Mexico's Industrial Sector Resilient in Q1, Despite External Threats (Publication Centre)

Yesterday's industrial production report in Mexico added weight to the idea that the sector improved marginally in the first quarter, despite many external threats. Industrial output rose 0.1% month-to-month in February, following a similar gain in January. The calendar-adjusted year-over-year rate rose to -0.1%, after a modest 0.3% contraction in January.

10 January 2018 Mexican Inflation at a 16-Year High. Non-core Prices to Blame (Publication Centre)

Yesterday's CPI report in Mexico showed that inflation remains high, but we are confident that it will start to fall consistently during Q1, thanks chiefly to a favourable base effect.

1 September 2017 Banxico's QIR Report is Upbeat, But Rates are on Hold Until 2018 (Publication Centre)

Banxico's Quarterly Inflation Report--QIR--for Q2 2017, published this week, confirmed that the central bank has become more upbeat about the economic recovery and the outlook for inflation. Banxico believes that the balance of risks to inflation and growth are neutral.

10 July 2017 Banxico Will Start to Mull Lower Interest Rates Early Next Year (Publication Centre)

Mexico's underlying inflation pressures and financial conditions are gradually stabilizing. Eventually, this will open the door for rate cuts in order to ease the stress on the domestic economy, particularly capex.

10 May 2017 Mexico's Confidence Indicators are Improving, but Headwinds Remain (Publication Centre)

Market participants and analysts have gradually softened their cautious stance towards Mexico, as concerns about the new U.S. administration's trade and immigration policies have eased, and risks of a credit rating downgrade have lessened.

11 September 2017 Inflation in Mexico Looks Scary but Soon will Start to Fall Rapidly (Publication Centre)

Mexico's inflation nudged up to a fresh 16-year high in August, but the details of the report confirmed that underlying pressures are easing, in line with our core view.

10 October 2017 Inflation is Finally Abating in Mexico But no Banxico Easing Until Q2 (Publication Centre)

Inflation in Mexico fell significantly in September. Data yesterday showed that the CPI rose just 0.3% month-to-month, pushing the year-over-year rate down to 6.4% from 6.7% in August, its highest level in 16 years.

23 January 2017 Chile's Central Bank Cuts Rates, Leaving the Door Open for More (Publication Centre)

Chile's central bank cut the country's main interest rate by 25bp to 3.25% last Thursday. The easing was expected, as the board adopted a dovish bias last month, after keeping a neutral stance for most of 2016. Last week's move, coupled with the tone of the communiqué, suggests that further easing is coming, as growth continues to disappoint and inflation pressures are easing.

15 January 2018 Mexico's Industrial Sector Remains Unresponsive, but Q1 Will be Better (Publication Centre)

Upbeat survey data, a competitive MXN, and the strong U.S. manufacturing sector indicate that Mexican industry should be rebounding.

22 August 2017 Economic Activity is Turning Up in LatAm, but no Boom Coming (Publication Centre)

LatAm's economies are gradually rebounding, boosted by easier monetary policy in most countries, falling inflation, and a relatively calm external backdrop.

2 October 2017 Banxico Maintains a Neutral Tone, But Challenges are Approaching (Publication Centre)

Banxico left its benchmark interest rate on hold at 7.0% at last Thursday's policy meeting.

22 December 2017 A Tough end to Q4 for Mexico the H1 Outlook Remains (Publication Centre)

Mexican retail sales jumped 1.0% month-to-month in October, the biggest gain since February, following a poor performance in Q3.

22 February 2017 The MXN Probably is Undervalued, but it Could Move Even Lower in Q2 (Publication Centre)

With the MXN up more than 7% since the low of 21.9 against the dollar in January, investors are pondering just how high the Mexican currency can go. We believe that the MXN will continue to hover around its recent range, 20.1-to-20.5, in the near term, but will come under pressure again as protectionist policies in the U.S. take real shape in the spring or summer.

22 September 2017 The Earthquake's Economic Hit Appears to be Modest (Publication Centre)

Before this week's earthquake, the resilience of Mexico's economy in the face of a volatile and challenging global backdrop owed much to the strength of domestic demand, especially private consumption.

22 January 2018 External Factors for LatAm are Positive, but Vary Across Countries (Publication Centre)

Recent global developments lead us to intensify our focus on trade in LatAm.

15 March 2017 Mexican Manufacturing will do Fine in Q1, Despite Threats (Publication Centre)

The collapse in capital spending in the oil sector and poor construction spending have constrained aggregate Mexican industrial output in recent months, despite the strength of the manufacturing sector. Total production fell 0.1% year-over-year in January, though note this was a clear improvement after the 0.6% drop in December, and better than the average 0.4% contraction over the second half of 2016.

2 May 2017 Economic Activity in Mexico Remains Strong, but Will Slow (Publication Centre)

Brazil's recovery has been steady in recent months, and Q1 likely will mark the end of the recession. The gradual recovery of the industrial and agricultural sectors has been the highlight, thanks to improving external demand, the lagged effect of the more competitive BRL, and the more stable political situation, which has boosted sentiment.

15 November. 2016 Mexico's Benign Industrial Outlook Clouded by the U.S. Policy Agenda (Publication Centre)

Mexico's latest industrial production data were worse than we expected. Output rose just 0.1% month-to-month in September, pushing the year- over-year rate down to -1.3%, from a downwardly revised +0.2% in August.

15 May 2017 Mexican Manufacturing set to Remain Resilient in Q2 and Q3 (Publication Centre)

Recent industrial data for Mexico point to renewed upside risks for GDP growth, despite the likely headwind to consumption from high inflation and depressed confidence.

18 December 2017 The Easing Cycle is Ending in Most of LatAm, Mexico will be the Outlier (Publication Centre)

Most central banks in LatAm have ended the year in a relatively comfortable position; their economies are improving and inflation is under control or even falling.

16 June 2017 LatAm Markets will Continue to Cope Well with Fed Tightening (Publication Centre)

LatAm markets reacted well to the U.S. Fed's decision to increase the funds rate by 25bp, to 1-to-1¼%, on Wednesday. Currencies moved only slightly after the decision and asset markets were relatively stable. Yesterday, some currencies retreated marginally as investors digested the relatively hawkish message from the Fed and Chair Yellen's press conference.

17 July 2017 Mexico's Industrial Sector Remains Subdued, Oil is Mainly to Blame (Publication Centre)

Upbeat survey data and relatively resilient consumer spending numbers indicate that the Mexican economy is in good shape, despite a marginal slowdown in most of Q2.

18 December 2017 Has Plunging Healthcare Inflation Held Down Nominal Wage Gains? (Publication Centre)

The shortfall in nominal wage growth, relative to measures of labor market tightness, remains the single biggest mystery of this business cycle.

Al Jazeera - EU-Japan free trade (Media Centre)

EU-Japan free trade: Japan and the European Union agreed on an outline for a massive trade deal this week that will rival the size of NAFTA, the free trade accord that the United States has with Canada and Mexico, currently the largest one in the world. Claus Vistesen, the chief eurozone economist with Pantheon Macroeconomics, assesses what's in the agreement and why it matters (19mins 10 secs).

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