Mexico's inflation and minutes in focus

This week's data will show 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 are expected to have a modest increase of 0.2%m/m sa (consensus 0.5%). On Thursday, bi-weekly CPI data are released, and we expect a below-consensus increase of 0.4% 2w/2w (consensus 0.48%). Finally, on Friday, the September unemployment rate is released, for which we expect 4.2% sa (consensus 4.3%)", estimates Barclays. 

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", added Barclays.