EM Tightening & Inflation Perspective
Mexico's central bank also entered the debate with an unexpected decision to raise rates to 4.25% from 4.00%. There was speculation they could hint at a future hikes, but the move remained a surprise, leading to a sharp jump in the peso. At the same time, the Banxico itself said risks were now balanced in a sign they see this as more of an insurance move than the start of a cycle.
All attention in the months ahead will be on the developments in inflation. This includes today's release of May US PCE report. The consensus is for headline inflation at 3.9% (from 3.6%) and core at 3.4% (from 3.1%). Upward surprises in CPI have failed to sustain rallies in the dollar with the market mostly siding on the 'transitory' debate but if numbers continue to beat, that will change.The consumer will also be in focus with spending forecast up 0.4% in the PCE report. That will be followed by the UMich final sentiment report for June. The consensus is 86.5. One Fed speaker to watch will be Mester, who generally aligns with the FOMC leaders.
Yen Tracking Yield Spreads again?
by Ashraf Laidi | May 30, 2023 17:08
Charts' Year to Date Performance
by Ashraf Laidi | May 29, 2023 16:23
What's a Cycle Completing Trade?
by Ashraf Laidi | May 19, 2023 18:50
الذهب: نهاية أو استراحة؟
by Ashraf Laidi | May 17, 2023 14:14
First Republic, Debt Ceiling, CDS & Bitcoin
by Ashraf Laidi | Apr 26, 2023 14:42