Markets are stable, awaiting more economic information

The exchange rate in Mexico starts the week at 19.8331 pesos per dollar. In the face of a week full of economic information and in view of the monetary policy decisions of central banks such as those of the United States and Mexico, the Mexican peso starts the week around 19.80, very much awaiting the magnitude of the rate cut that the Federal Reserve (Fed) will eventually make on September 18, as well as everything related to judicial reform in the Senate.

During the early morning, the exchange rate again exceeded 20 pesos per dollar, and then continued to fall again against the dollar, once the reform of the Judicial Branch was approved in the Commissions.

Meanwhile, the inflation rate in Mexico fell in August to 4.99 percent from 5.57 percent the previous month. Although it remains above the Bank of Mexico’s target for 42 months, analysts expect the monetary authority to make a rate cut in September.

The appreciation of the Mexican peso, of around 0.65 percent, occurs amid the advance of the dollar worldwide, since according to the DXY index, which measures its performance against a basket of six international currencies, it appreciated 0.35 percent, to 101.499 units.

The publication of the US employment report has reinforced investors’ doubts about the slowdown in economic growth in the main developed economies, especially in the United States, which has replaced inflation as the main cause of concern.

However, the market expects the Fed to cut rates by at least a quarter of a percentage point, and Tuesday’s inflation data will provide further clues. Investors will also be keeping an eye on Thursday’s session, when the European Central Bank (ECB) will meet. The market is pricing in the central bank cutting the price of money by another 0.25 percentage points, to 4 percent.

Wall Street and the Mexican Stock Exchange (BMV) opened higher. The Nasdaq rose 1.16 percent; while the S&P 500 rose 0.95 percent. The BMV Price and Quotation Index gained 0.45 percent.

Oil prices are moving away from their annual lows, with a barrel of Brent at $71.33 and West Texas crude, the benchmark in the United States, at $68.06.