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Summary 1/2 - Banxico Minutes, Sao Paulo Mulls Tightening Restrictions

LATAM

MEXICO - New marginal low in USDMXN this morning at 19.9384, however bounces back above 20.00 for now. Economic Activity IGAE Y/Y for September (Expected -7.00% vs Prior -9.45%). Final Q3 GDP also released, both at 12:00 GMT.

- Banxico improves its GDP forecasts for the Mexican economy in QIR. Comments from Leon included:

  • Gross Fixed Investment faces short, mid-term challenges.
  • Inflation still very affected by pandemic.
  • Rate pause gives space to mull CPI behaviour.

- More clues will be sought from the Minutes released at 1500GMT/1000ET. For reference the last vote was split 4/1 in favour of a hold and so discussions will be eagerly anticipated.


BRAZIL - Campos Neto on the wires again last night assuring inflation is under control. BRL best performer yesterday but USDBRL still above Mondays lows and 200-day MA at 5.2950/90

  • Sao Paulo State mulls tightening Covid restrictions. They have previously ruled out a lockdown but this is evidence the pandemic is still very much at the forefront of economic concerns.
  • Petrobras 2021-2025 Capex seen at $55b, With 84% for Exploration and Production as the company approves 2021-25 Strategic Plan.

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