Mexico’s inflation extended its gradual slowdown in early July, roughly in line with forecasts, helped by double-digit interest rates and the strongest peso since 2015, Bloomberg News reported. Consumer prices rose 4.79% in the first half of the month compared to the same period a year earlier, down from 4.93% in late June, the national statistics institute reported Monday. The result was just above the 4.77% median estimate of economists surveyed by Bloomberg.
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Mexico
Mexico has been hit with three sets of trade arbitration proceedings in the past few days, according to the International Centre for Settlement of Investment Disputes (ICSID), Reuters reported. First Majestic Silver and Silver Bull Resources, both Canadian companies, as well as U.S. food firm Arbor Confections have filed cases against Mexico, ICSID said in brief statements issued between Thursday and Friday. The proceedings all invoked the North American Free Trade Agreement (NAFTA) and the United States-Mexico-Canada Agreement (USMCA) which replaced NAFTA.
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Cineworld Group is looking at Eduardo Acuna, who runs the Americas operations of Mexico's Cinepolis, as a potential candidate to take the helm at the embattled British cinema chain operator when it emerges from bankruptcy proceedings, Sky News reported. It is not clear whether Acuna was formally in the frame to take the job or how quickly Cineworld's new owners were seeking to make an appointment, the report said.
The Bank of Mexico maintained its benchmark interest at 11.25% on Thursday for the second time, signaling it will hold the rate "for an extended period" as inflation in Latin America's second largest economy slows but remains above the bank's target, Reuters reported. The unanimous decision by the central bank's five-member board was in line with analysts' forecasts and came as data shows annual inflation at its lowest in more than two years.
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Bond investors in Credito Real SAB are crying foul after being left in the dark for more than a year in one of the largest corporate blowouts in Mexico’s recent history, Bloomberg News reported. After defaulting on $1.9 billion of dollar bonds in February 2022, the non-bank lender embarked on a liquidation process in a Mexico City court that bondholders say has been tilted against them. Now, lawyers are pushing for a deal that they say would allow creditors to recoup as much as 23 cents on the dollar.
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Mexican retail sales rose much more than expected in April, data from national statistics agency INEGI showed on Tuesday, pointing to a strong start to the second quarter despite tight financial conditions, Reuters reported. Sales rose 1.5% in the month from March, beating market expectations of a 0.2% increase in a Reuters poll, helped by a strengthening peso and falling inflation, which has been hovering its lowest in almost two years.
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Mexico's annual inflation rate slowed in May for a fourth consecutive month to 5.84%, data from statistics agency INEGI showed on Thursday, beating forecasts and continuing a downward trend spurred by a long cycle of rate hikes, Reuters reported. Headline inflation came in below a forecast of 5.90% and is now at its lowest since August 2021. Consumer prices fell 0.22% in May from April, according to non-seasonally adjusted figures, against an expected drop of 0.16%. Nonetheless analysts say future drops in inflation may now be trickier, prompting a delay in rate cuts.
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Analysts from Goldman Sachs & Co and XP Investimentos are betting a fresh bout of dollar weakness can fuel gains in the Mexican peso, the world’s best performing currency, Bloomberg reported. The bullish calls come after the currency — dubbed the “super peso” because of its astounding rally — gave up some of its gains amid political noise at home and a global selloff amid U.S. debt-ceiling talks. Despite recent losses, the peso is still up 9.5% against the dollar this year, the best major currency in the world in that span.
A group of over 200 shareholders of Credito Real, a troubled Mexican payroll lender, this week issued a legal letter demanding the company hold a general assembly within the next 15 working days in their latest bid to recoup billions in losses, Reuters reported. Credito Real defaulted on a 170 million Swiss franc ($175.98 million) bond last year, kicking off a commercial liquidation process in Mexico criticized by shareholders for lacking transparency.
The Mexican peso staged a strong rebound from its recent lows on Wednesday after inflation data spurred expectations that monetary policy would need to stay tight, while the Brazilian real rose to a one-week high, Reuters reported. The peso, the best performing currency in Latin America this year, was up 0.8% against the dollar, snapping a six-day losing streak. Data showed consumer prices in Mexico fell more than expected in the first half of May, with 12-month headline inflation reaching 6.00% — the lowest level since September 2021.