Mexico City. As oil prices hit a 10-month high due to possible supply shortages, financial markets await US inflation data for August with caution.
The Mexican peso rebounded from opening falls and gained ground against the dollar on Tuesday, for the second session in a row. According to data from the Bank of Mexico (BdeM), the national currency appreciated by 0.33 percent this Tuesday, equivalent to 5.65 cents, to close at 17.2493 units per spot dollar.
The exchange rate in Mexico moves between a maximum of 17.2970 units and a minimum of 17.2240 units.
Investors are gearing up for the release of August inflation data in the United States tomorrow. Inflation is expected to increase from 3.2 to 3.6 percent annually, while core inflation will decrease from 4.7 to 4.3 percent.
However, the main fear in the market is a more than expected rebound in US headline inflation or a less than expected relaxation in the underlying factor. This will increase the bets that the Federal Reserve (Fed) will have to further tighten the monetary policy, confirmed in the analysis area of CIBanco.
While waiting for the data, the US dollar index (DXY) reported volatility, as it remained on the rise during the session and gradually reduced its gains.
“There is a possibility that the dollar will continue to decline. Unless tomorrow’s inflation data beats estimates and puts another interest rate hike on the table. Otherwise, greater appreciation is expected for the Mexican peso, which could lead to pair back to the barrier of 17 per dollar,” predicted the OctaFX analyst team.
In Mexico, the economic package for 2024 proposes an increase in the fiscal deficit from 3.3 to 4.9 percent of GDP in 2023, the highest negative balance in 36 years. Therefore, the 10-year M bonds reported an advance, to 10.156 percent.
The Organization of the Petroleum Exporting Countries (OPEC) continued its forecasts for strong global growth in demand in 2023 and 2024, pointing to signs that major economies are stronger than expected. OPEC’s monthly report predicts that global crude oil demand will increase by 2.25 million barrels per day by 2024.
With OPEC predicting a supply shortage amid increased oil demand from major economies, Brent crude futures gained 1.6 percent to $92.06 a barrel, while West Texas Intermediate futures in the United States (WTI) for in October increased by 1.55 dollars, to 88.84 dollars.
For its part, Wall Street ended lower on Tuesday. Among the most anticipated events of the fall, Apple announced the launch of the iPhone 15 at its annual event.
The tech-heavy Nasdaq fell 1.04 percent to 13,773.61 points amid declines in Oracle ( ORCL ) shares after the software maker posted a slowdown in cloud sales growth. The S&P 500 fell 0.57 percent, to 4,461.90 integer; and the Dow Jones registered a marginal drop of 0.05 percent, to 34,645.99 points.
Tech stocks take center stage. Apple shares fell 1.7 percent, as there is a war between China and the United States over the sale of the company’s apple products.
In Mexico, the Mexican Stock Exchange fell 0.78 percent, equivalent to 407.04 points, to close at 51,860.45 points.