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Heading North


Modi, AMLO Top Major Economy Leader Poll, Macron Last


Under Pressure


Trend Condition Remains Bearish

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  • Yesterday's release of the economic activity index which rose 13.2% y/y in August, disappointed the 14.4% print in July and consensus expectations for an advance of 15.5%.
  • The index fell 1.9% month on month after gains of 3.2% in July and 7.5% in June. Construction and manufacturing fell 2.7%. Services and commerce declined 1.5%. Mining and agriculture were broadly unchanged.
  • While the report should not signal immediate concerns, analysts have pointed to the reading potentially supporting the more gradual approach to monetary tightening with the weaker results raising questions on future growth and concerns about the lack of catalysts following the social unrest and easing of pandemic related restrictions.
  • As a reminder, the central bank board were last split 4-3, in favour of a 25bp hike versus a more aggressive 50bps at their September meeting. The next BanRep meeting will be on October 29.
  • Overnight Colombian congress approved next year's COP350.4T ($93 billion) budget which is 5.3% higher than last year's, according to a statement from the Finance Ministry.
  • The law includes the suspension of part of the guarantee law that will allow public entities to execute contracts four months before the elections, which the government has said will help in the economy's recovery. (BBG)