Daily digest market movers: Mexican Peso falls on risk aversion

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  • According to CBS News, two US officials commented “that a major Iranian attack against Israel was expected as soon as Friday, possibly to include more than 100 drones and dozens of missiles aimed at military targets inside the country.”
  • The University of Michigan's preliminary April Consumer Sentiment deteriorated to 7.9, below estimates of 79.0. Inflation expectations for one year rose to 3.1% from forecasts and the previous reading of 2.9%. For five years, they increased from 2.8% to 3.0%.
  • Mexico’s economic docket was scarce on Friday, though crucial data was revealed during the week. On Tuesday, Mexico's Consumer Price Index (CPI) continued its disinflation trend, with both the overall and core CPI decelerating monthly and yearly. This supported the Bank of Mexico's (Banxico) decision to lower interest rates on March 21, although the yearly CPI slightly exceeded expectations.
  • On Thursday, Mexico’s Industrial Production dipped by 0.1% MoM in February, falling short of the expected 0.3% growth. However, it increased by 3.3% in the twelve months to February, missing forecasts by a narrow margin.
  • Across the border, US inflation data was revealed. On Wednesday, US CPI data indicated higher-than-expected inflation, while underlying CPI, excluding food and energy, was steady compared to February’s figures. On Thursday, prices paid by producers, also known as the Producer Price Index (PPI), decreased on monthly and annual figures from the previous month.
  • Initial jobless claims for the week ending April 6 were 211K, lower than the anticipated 215K and the previous week's 222K.
  • This data, coupled with Wednesday's inflation report showing a monthly CPI rise of 0.4% and a yearly increase of 3.5%, has led traders to anticipate two rate cuts by the Federal Reserve in 2024. Data from the Chicago Board of Trade indicates the fed funds rate is expected to finish the year at 4.92%.


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