In the past few quarters, the Mexican economy has come to a standstill. The deceleration in the economic growth is likely to have extended into the third quarter. According to a Wells Fargo research report, the third quarter growth is likely to have come in at just 0.2 percent quarter-on-quarter, after zero growth in the second quarter.
High real interest rates in Mexico, along with some deceleration in growth in the U.S., appears to be weighing on the Mexican economy. On a year-on-year basis, the Mexican growth is likely to have risen 0.5 percent; however, that seems to be due to technical factors rather than reflective of any real rebound in the Mexican economy.
Mexican manufacturing and services PMIs might both stay below the breakeven 50 level in October, which signifies that those surveys would stay at levels in line with a contracting economy, stated Wells Fargo.
Meanwhile, the Brazilian central bank is likely to lower its policy rate by 50 basis points to 5 percent, with slow economic growth and weak inflation giving room for further easing of monetary policy.
