Mexico inflation and minutes in focus

This week's data will allow us to assess how Mexican economic activity is faring in a global environment of low growth and subdued inflation that is unsupportive for EM. On Wednesday, August retail sales is expected to have a modest increase of 0.2%m/m sa (consensus 0.5%). On Thursday, bi-weekly CPI data are released, and a below-consensus increase of 0.4% 2w/2w (consensus 0.48%) is expected. 

The September unemployment rate is released, for which a 4.2% sa (consensus 4.3%) is expected. The data is likely to confirm a moderate pace of economic activity, restrained inflation and low FX pass-through, which, together with expectations of a delayed Fed hike, should lead Banxico to hold the overnight rate at its meeting on October 29. 

"Events of the next week should support our trade recommendation of holding duration risk in local assets", says Barclays.