Daily digest market movers: Mexican Peso drops on geopolitical risks

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  • Mexican political turmoil eases as market participants prepare for the change of president on October 1, a bank holiday in Mexico.
  • According to the swaps markets, Banxico is expected to lower borrowing costs by 175 bps by the end of 2025.
  • The US Department of Labor revealed that the August Job Openings & Labor Turnover Survey (JOLTS) increased from 7.711 million to 8.04 million, exceeding estimates of 7.655 million.
  • The ISM Manufacturing PMI in September rose by 47.2, unchanged from the previous reading, but it missed estimates of 47.5.
  • Last week Atlanta Fed President Raphael Bostic commented that he will closely monitor jobs data to assess the Fed's policy stance. He indicated that he is open to cutting rates by 50 basis points (bps) while acknowledging that he is not yet ready to declare victory on inflation.
  • Market participants have put the odds of a 25 bps cut at 61.6%. According to the CME FedWatch Tool, the chances for a larger 50 bps cut diminished to 38.4%.

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