Mexico consumer confidence likely to tick up

Consumer confidence in Mexico, having stalled over the past two to three quarters, saw a sudden surge in June, reaching its highest level since August 2013. The sharp jump was quite a surprise, materialising in the wake of relatively weak growth data this year and the related deterioration in labour market indicators. One explanation could be the low inflation outlook, which has likely also helped consumer spending (despite low wage growth), says Societe Generale. 

However, July numbers show that the June release was out of trend and that consumer confidence has generally been flat this year at slightly above 92. "There is a reason to anticipate a significant jump in confidence unless the economy grows above trend and labour market indicators - including wages - improve meaningfully. As a result, consumer confidence is likely to tick up to 92.7 in August while the seasonally adjusted index should rise to 91.8", states Societe Generale.