Inflation in Mexico Slows to 3.63% Annually
This week, key economic data was released for Mexico and the United States, including inflation figures. In Mexico, the National Consumer Price Index (INPC) reported a quinzenal advance of 0.28% in the first two weeks of October, placing annual inflation at 3.63%.
According to data released on Thursday by the National Institute of Statistics and Geography (Inegi), inflation decelerated in the first half of the month after four consecutive quin weeks of acceleration.
The services sector had the most significant impact on consumers’ wallets, with a 4.42% annual price increase, while goods became more expensive at 4.06%. The underlying inflation, which excludes volatile items like food and energy, stood at 4.24%, above the general inflation but lower than the previous month’s 4.30%.
In the first half of October, non-underlying inflation was at 1.58%. Within it, the price of agricultural products increased by 1.06% annually, while energy and government-authorized tariffs rose by 1.99%. The items that saw price decreases were: Egg (-2.13%), Chicken (-0.95%), Tomato (-3.34%), Potato and other tubers (-4.93%), Green Tomato (-6.95%), Avocado (-5.91%), Orange (-6.30%), Banana (-2.72%), Serrano Chili (-4.18%), and Lemon (-4.50%).
US Inflation Rebounds to 3% in September
The Consumer Price Index (CPI) in the United States rose to 3% by the end of September, up from 2.9% in August, according to the Department of Labor.
The increase in consumer prices slowed to 0.3% from the previous month’s 0.4%, despite an increase in energy prices.
The underlying inflation, which excludes volatile items like food and energy, moderated during September to 0.2% and annually to 3%, down from the previous month’s 3.1%.
The Department of Labor had planned to publish its index on September 15, but the US government shutdown caused a delay in its release.
The White House announced on Friday that, due to the US government shutdown, “there will likely be no inflation report in October.”
CEPAL Raises Growth Forecasts for Mexico and Latin America
The Economic Commission for Latin America and the Caribbean (CEPAL) raised its growth forecasts for Latin American economies to 2.4% this year and 2.3% next year, amid a regional landscape marked by low investment and productivity, stagnant labor markets, and high levels of inequality.
CEPAL revised its growth projection upwards for the second time, from 2.2% projected in August.
The Commission upgraded forecasts for Brazil, Chile, Ecuador, Mexico, Peru, and Venezuela, among others. For the Mexican economy, CEPAL raised its growth estimate to 0.6%.
For Chile, it projected an expansion of 2.6%, for Colombia 2.5%, Peru 3.2%, and for Brazil 2.5%.
Mexico’s Economy Ends Two Months of Weak Growth with 0.1% Expansion in September: IOAE
The Opportune Indicator of Economic Activity (IOAE) recorded a mere 0.1% expansion in September compared to the previous month, reported the National Institute of Statistics and Geography (Inegi).
With this data, the IOAE would repeat August’s dynamics, where a growth of just 0.1% is also estimated.
The economy would link two months of growth after falling 0.9% in July.
How Did the Markets Close?
Exchange Rate
The exchange rate ended the day at 18.4411 units per dollar. Against a previous record of 18.3952 units reported by Banco de México (Banxico) with yesterday’s data, the movement represented a 0.25% or 4.59-centavo drop for the peso.
The dollar’s price moved within a range between a high of 18.4641 units and a low of 18.3434. The Dollar Index (DXY), by the Intercontinental Exchange, which compares the US dollar to a basket of six pairs, fell -0.03% to 98.91 points.
BMV and Biva
The benchmark stock index, S&P/BMV IPC, fell 0.60% to 61,145.49 points, in a market also focused on the quarterly earnings season.
Industrias Peñoles’ stock led the declines, falling 3.86% to 734.25 pesos, followed by Megacable’s stock, which dropped 3.73% to 52.97 pesos.
Wall Street
The three major stock market indices on Wall Street closed higher in Friday’s trading.
Lower-than-expected inflation data and encouraging corporate results pushed the benchmarks to reach new historical highs.
The Dow Jones Industrial Average, comprising the stocks of 30 major companies, gained 1.01% to 47,207.12 points, while the S&P 500, made up of the most valuable companies, advanced 0.79% to 6,791.69 points.
The Nasdaq Composite gained 1.15% to 23,204.87.
In weekly performances, all three primary indices registered gains. The Dow Jones rose 2.93% and has gained 10.66% year-to-date; the S&P 500 advanced 2.72% and is up 15.05% this year; the Nasdaq Composite increased 3.18% and is up 19.59% this year.
To Keep an Eye On
Trump Breaks Off Trade Negotiations with Canada
US President Donald Trump abruptly ended trade negotiations with Canada, furious over an advertising campaign in the neighboring country against tariff hikes, as Canadian Prime Minister Mark Carney attempted to calm the waters.
The announcement represented a sudden shift in the Republican president’s stance following a cordial meeting on October 7 at the White House with Canadian Prime Minister Carney.
Trump expressed his anger on his social media platform Truth Social after calling a Canadian provincial ad “false” that, according to him, misquoted former US President Ronald Reagan on tariff policy.
Trump claimed the ad, produced by the Canadian province of Ontario and set to air on US networks, aims to “interfere in the decision of the US Supreme Court,” which must rule on his broad global tariffs.
On Friday morning, Trump attacked Canada again in a series of vehement social media messages, asserting that “Canada cheated and got caught.”
Ontario Premier Doug Ford said on Friday that, after talking to Carney, they would withdraw the ad “starting Monday to allow for the resumption of trade negotiations.”
Ford requested his advisors to maintain the ad’s broadcast during the first two games of the upcoming weekend’s World Series, where a Canadian team, the Toronto Blue Jays, faces the Los Angeles Dodgers.
Earlier Friday, before his Asia trip, Carney did not directly mention Trump’s change in stance but stated that bilateral talks had shown progress. “We are ready to resume that progress… when the Americans are ready,” he added.
Economic Briefs:
Japan: New Prime Minister Sanae Takaichi pledged to bring Japan’s inflation to the 2% target.
In September, Japan’s inflation accelerated to 2.9% interannually.
China: Grew at its slowest pace in a year during the third quarter.
The Gross Domestic Product (GDP) in the July-September quarter grew 4.8% annually, according to the National Bureau of Statistics (NBS), down from 5.2% in the previous three months.
This represented China’s slowest growth since the same quarter last year, when the GDP grew 4.6%.
(With information from Belén Saldívar, José Antonio Rivera, Roberto Morales, Reuters, and AFP)
