The peso depreciated on Tuesday amid a general strengthening of the dollar, while the Mexican Stock Exchange reversed its initial gains, due to uncertainty surrounding the partial closure of the US Government, which entered its seventh day.
The cessation of activities keeps the publication of key economic information suspended, such as the non-agricultural payroll data that should have been released on Friday, an input of great relevance to calibrate the next steps of the Federal Reserve.
The currency was trading at 18.3944 per dollar near the end of business, down 0.33%, also pressured by a weak local auto industry report, which showed a drop in both vehicle production and exports in September.
“Given the importance of the sector for employment, industrial production and trade, the weak figures added downward pressure on the peso following yesterday’s decline in consumer confidence,” said Felipe Barragán, market strategist at digital broker Pepperstone.
The market now awaits the release on Thursday of a crucial local inflation report for September, as well as the minutes of the Bank of Mexico’s most recent monetary policy meeting.
Going forward, the outlook suggests that the peso could continue to lose some ground and end the year at levels close to 19 per dollar, with a decline of just over 3% compared to its current levels.
“We do not see that there are greater pressures on the exchange rate,” said Pau Messeguer, chief economist at Banco Multiva, during a meeting with journalists.
“I think we already know the information we needed to know: we know that the USMCA is going to be renegotiated and we basically know what the trajectory of interest rates will be in both the United States and Mexico,” he added.
The benchmark S&P/BMV IPC stock index fell 0.31% to 60,215.75 points, in its third consecutive day of losses.
The shares of the Regional bank, known as Banregio, led the declines with 4.78% less to 155.20 pesos, followed by those of the restaurant operator Alsea, which subtracted 3.73% to 55.68 pesos.
On the contrary, a rise of 1.63% to 138.21 pesos in the securities of the mining company Grupo México stood out after they registered their worst daily fall in 17 years the day before after surprising the market by launching an offer for the acquisition of Banamex.
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On Tuesday the company insisted on its proposal, saying that it would not need to significantly increase its debt load to carry out the transaction and that in the future it could consider listing the financial group’s papers on the stock market.
In the debt market, the primary yields of Treasury Certificates (Cetes) decreased in the weekly auction of government securities, with the exception of the one-month benchmark rate, which was placed at 7.47%, 28 basis points above its previous auction.
With information from Reuters.
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