Bank of Mexico

More Smoke than Fire

December 20, 2019

A lot of economic data was released on the final day of the final meaningful week of 2019, but the market is settling into yearend mode and showed a muted reaction. The dollar firmed overnight by 0.3% against the euro and Swiss franc but slipped 0.3% relative to sterling. There were dollar upticks of 0.2% […] More

Bank of Mexico’s Fourth Interest Rate Cut since August

December 19, 2019

The four 25-basis point central bank rate cuts in 2019 reverse the four hikes made in 1918, but the new 7.25% overnight interbank rate level is still four percentage points higher than the end-2015 level. A released statement explaining today’s rate reduction cites continuing sluggish growth, a weak economic outlook, growth and inflation risks skewed […] More

Bank of Mexico Interest Rate Cut Again

November 15, 2019

The Governing Board of the Bank of Mexico voted 5-2 in favor of a third consecutive 25-basis point interest rate cut, which becomes 7.5%. The two dissenters wanted a 50-basis point reduction. The combined 75-basis point reduction remains small in comparison with 500 basis points of tightening during 2016-18. Officials released a statement that notes […] More

Out of Fixed Income Assets and Into Stocks

November 15, 2019

After a few days that saw sovereign debt yields decline, ten-year U.S. Treasuries, German bunds and British gilts each rose two basis points overnight. In stock market action, equities rose 0.9% in Australia, 1.1% in South Korea, 0.7% in Japan and Taiwan but slipped 0.6% in China. European stock markets so far show gains of […] More

Bank of Mexico Cuts Overnight Interbank Rate Again

September 27, 2019

Late yesterday came news that the Bank of Mexico had reduced its overnight interbank rate by 25 basis points for a second straight month.  The rate level now becomes 7.75%. These moves reverse 100 basis points of policy tightening in 2018, and more cuts seem likely soon. According to a released statement, five of seven […] More

Trade Talks Back in the Spotlight

September 27, 2019

A number of factors could have made Friday an ugly day in the marketplace — the U.S. and British political crises, weak European and U.S. data, and Japanese disinflation. But instead, the mood has been lifted by the announcement that U.S. and Chinese trade delegations will restart formal talks in Washington on October 10th. Share […] More

Mexico Joins Group of Central Banks to Cut Central Bank Interest Rate

August 16, 2019

President Trump’s hostile handling of America’s southern neighbor since mid-2015 had created a vicious cycle of  peso depreciation and accelerating domestic inflation in Canada, forcing Mexican monetary authorities to repeatedly jack up their overnight interbank interest rate target from 3.0% prior to the first move in mid-December 2015 to 8.25% after the last move in […] More

More Weak Data around the Globe

August 16, 2019

New Zealand’s manufacturing purchasing managers index fell below the neutral threshold of “50” for the first time since September 2012, with a reading of 48.2 in July after 51.1 in June. U.S. housing starts dropped 4.0% in July to a 5-month low of 1,191 million units. This was only 0.6% greater than in July 2018. […] More

Trade Showdown and Many Data Releases

June 28, 2019

The Group of Twenty annual summit kicked off in Osaka and looms as a crossroads in the U.S.-Sino dispute over trade. Either the conflict gets diffused here, or retaliatory tariffs are likely to escalate sharply. Being the last business day of the second quarter and June, today’s data menu was plentiful. The dollar eased overnight […] More

U.S.-Sino Trade Tensions and U.K. Tory-Labor Brexit Talks Take a Turn for the Worse

May 17, 2019

Chinese officials poured cold water on hopes that trade tensions with the United States might de-escalate. In reaction, China’s stock market tumbled 2.5%, and the yuan fell 0.4% against the dollar. Share prices also dropped 1.5% in Hong Kong, 1.3% in India, 1.2% in Indonesia, 0.9% in Taiwan, 0.6% in South Korea and 0.8% in […] More

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