The Day at a Glance | August 21 2024

The Top

• The Citi Survey showed that most analysts expect the Central Bank of Mexico to make another 25 basis point cut in its upcoming meeting in September.

• Today at 12:00 p.m., the Federal Reserve´s meeting minutes (from its July 31^st meeting) will be released. 

• Minnesota Governor Tim Walz will accept the Democratic vice-presidential nomination on Wednesday, just 11 weeks before he and his running mate, Kamala Harris, face former Republican President Donald Trump in the 2024 US elections.

• According to a Reuters survey, most economists believe the Bank of Japan will raise interest rates again in December.

• Oil prices stabilized on Wednesday, with Brent holding above $77 a barrel, driven by expectations of slower demand in China and diminished concerns about a supply disruption in the Middle East.

• US indices are recording slight changes as Wall Street awaits the Fed´s meeting minutes.

Economic Environment

The Citi Survey showed that most analysts expect the Central Bank of Mexico to make another 25 basis point cut in its upcoming meeting in September. The Citi survey consensus forecasts a 0.13% increase in the general National Consumer Price Index and a 0.18% rise in core inflation for the first half of August. The expected increase is 0.25% m/m for general inflation and 0.31% m/m for core inflation. Over the next 12 months (Aug/Aug) and on an annual basis, inflation is expected to set at 3.70%. By year-end, general and core inflation expectations are set at 4.60% (previous 4.60%) and 4.00% (previous 4.00%), respectively. For 2025, the expectations are 3.86% (previous 3.90%) and 3.70% (previous 3.80%), respectively. The funding rate is expected to close the year at 10.25% (previous 10.50%), and most analysts expect the Central Bank of Mexico´s next move to be a 25 basis point cut in its next meeting, which is scheduled for September. The exchange rate is expected to close 2024 at 19.00 pesos per dollar and at 19.50 pesos per dollar in 2025. Real GDP growth for 2024 is forecasted at 1.7% (previous 1.7%) and at 1.5% (previous 1.5%) for 2025. 

Markets and Companies

US indices are recording slight changes as Wall Street awaits the Fed´s meeting minutes. Investors are looking for more information on the possibility of a rate cut from the Federal Reserve’s last meeting. In Europe, stock markets are up, recovering after breaking a long winning streak on Tuesday. The Stoxx 600 was up 0.4% at 1:57 p.m. London time, steadily gaining ground throughout the session. Mining stocks rose 1.23%, and tech stocks increased by 0.85%, while telecommunications were down 0.12%. Asia-Pacific markets mostly fell on Wednesday after US benchmarks, the S&P 500 and Nasdaq, broke an eight-day winning streak overnight. Additionally, Japan’s trade data for July showed that exports rose less than expected, while imports increased more than anticipated. In commodities, oil prices stabilized after declines were driven by concerns over Chinese demand and the Middle East conflict. Metals are logging mixed figures, and cryptocurrencies are down. In Mexico, the IPC is up +0.13%% and stands at 54,061 points.

The exchange rate stands at 19.21 after closing at 18.99 yesterday.

Corporate News

• Target shares jumped more than 15% in pre-market trading after reporting fiscal second-quarter earnings that exceeded Wall Street’s expectations.

• Macy’s shares fell more than 9% due to a lowered full-year sales forecast.