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Brazil Industrial Output, Mexico Consumer Confidence

LATAM
  • Brazil industrial production and Mexico consumer confidence highlight the data docket on Tuesday. Additionally, Brazil August PMI data and Colombia July exports will cross. CitiBanamex will also disclose their bi-weekly survey of economist expectations in Mexico. After the market close Chile’s central bank is expected to continue with its easing cycle, with surveyed analysts split between a 75-100bp rate cut.
  • The US dollar is dominant in early Tuesday trade, with the greenback favoured as US participants return from their Labor Day holiday. Markets had a generally risk-off backdrop, with US equity futures under initial pressure thanks to the resumption of the climb higher in US yields (10y yield back above 4.20%).
  • ECB Chief Economist Philip Lane offered a cautiously optimistic take on inflation, saying slowing in goods and services gauges are welcome and that underlying pressures will keep weakening, also describing 2023 as the year of “peak second round” as the effects of prior increases feed through the economy (BBG).
  • The RBA board left its official cash rate at 4.1% today, its third consecutive pause, noting Australia’s inflation has passed its peak, a move largely anticipated by the market (MNI).
  • China’s export growth will likely rebound later in the year and help consolidate GDP over the government's 5% target to 5.6% for 2023, while any additional policy measures should focus on reducing real-estate risk, a senior policy advisor told MNI.

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