Forex - Brazil Flows: BRL Drops to 3.905 On Weak China Data

 11:34 (GMT) 14 Dec

  [Forex Flows]

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Brazil Flows: BRL Drops to 3.905 On Weak China Data (0101-GTDF-C01)

BRL is adding losses, reflecting the negative turn in the global market after disappointing data for China's retail sales and industrial production. The negative moods was partially reversed by China's announcement that it will suspend punitive tariffs on US manufactured cars and parts for 90 days. Domestically, weaker than expected wholesale inflation and services data should add to the view that the BCB will delay the reversal of it monetary stimulus. Rates are hardly changed, pulled from both sides as BRL weakness pushes for higher rates and weaker data pushed for lower ones. Jan 20 Di is unchanged at 6.62% and Jan 21 is up 1bp to 7.59%.

No more data in the domestic market and in the US, November retail sales is the key release. We expect a flat figure overall, a 0.1% rise ex autos, but a stronger 0.4% gain ex autos and gasoline. November industrial production and October business inventories will follow.

Forex - Mexico Flows: MXN Extends Gains on Global Backrop. Local Market Closed

 11:49 (GMT) 12 Dec

 [Forex Flows]

MXN is extending yesterday gains as the global backdrop improved with the easing of tensions in the U.S. - China trade negotiations, after it was announced that China will reduce tariffs on US cars and Huawei executive was granted bail. MXN is stronger by 0.4% to 20.12. Local market is closed for banking holiday although the government is still at work. Overnight there was announced that the government will improve the offer for bondholders of the New Airport Corporation, on a bid to recover control of the project and shut it down. Later, data on industrial production will be released in mid-morning with a soft number expected.

In the US, CPI should post a 0.1% overall rise, 0.2% ex food and energy, and both very close to those levels before rounding. Data as expected would mean a slight acceleration from the last 3 months for core CPI. Budget data also scheduled for release

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