Summary 1/2 - Mexico IP, Brazil Focus Survey

MEXICO - USD edges further away from cycle lows and with EMFX remaining weak, consistent demand for USDMXN sees us up just shy of 1% from Friday's close. This week's economic calendar in Mexico will be relatively modest, IP for November at the top of the hour and October GFI on Tuesday.

• 1200ET/0700GMT Nov. Industrial Production SA MoM, est. 0.8%, prior 2%
• 1200ET/0700GMT Nov. Industrial Production NSA YoY, est. -4.2%, prior -3.3%
• 1200ET/0700GMT Nov. Manuf. Production NSA YoY, est. -2.4%, prior -1.3%

BRAZIL - USDBRL is up 4.1% year-to-date and is expected to open higher again as markets digest the moves in US yields and the more buoyant US Dollar. Additionally, the move in local rates extended on Friday, amid speculation surrounding fiscal pressures on the government as they attempt to deal with the pandemic, combined with heightened political tensions concerning the Lower House Speaker race. 10-year local swap rates hit a high of 7.89% on Friday and closed around 60 basis points higher on the year.

• IPCA Inflation will be the key focus of the week (released tomorrow) with the annual print expected to further rise to 4.37% versus a prior of 4.31%, putting further pressure on the central bank to maintain rates at 2.00%.
• Brazil's central bank released the Focus survey where they now see 2021 year-end Selic rate at 3.25% up from 3% and 2022 year-end Selic rate at 4.75% up from 4.5%.