Brazil’s manufacturing PMI fell to 44.8 in September, its weakest reading since April 2023, as financial markets tracked currencies, debt costs and government accounts across Latin America. The figures showed the strain: the dollar weighed on regional currencies and local-currency bonds, while Peru’s inflation climbed further above the central bank’s target range.
Who Carries the Cost
INEGI’s business confidence index in Mexico edged up to 48.4 from 48.3 in September. That marked its 19th consecutive month below 50. A separate survey gave factories a less bleak reading. The Mexican Institute of Finance Executives’ Manufacturing Indicator reached 50.0, up from 49.9 in August. IMEF called the results “mixed signals” and said the evidence wasn’t enough to confirm a broad recovery.
The gap between those readings matters. The IMEF manufacturing index rose 0.1 points, while its trend-cycle series reached 49.9. Its size-adjusted index fell 0.6 points to 51.9. The IMEF Non-Manufacturing Indicator, covering services and commerce, rose 0.2 points to 49.2 but stayed below 50; its size-adjusted index dropped 1.2 points to 48.5.
Mexico’s finance ministry, SHCP, reported a January-to-August fiscal deficit of MXN 739 billion, about US$40 billion at 18.30 pesos per dollar. The programmed figure was MXN 1.015 trillion. Argentina’s tax agency, ARCA, reported September revenue of AR$21,359 billion, or about US$14 billion at AR$1,525 per dollar. Revenue climbed 38.3% in nominal terms, after about AR$20.5 trillion in August.
Peru’s INEI reported Lima annual inflation of 4.55% in September, up from 4.44% in August and above the central bank’s target range of 1% to 3%. The briefing said a firm dollar raises the local-currency cost of foreign debt and weighs on imported inflation. Those costs reach far beyond a trading screen.
Chile’s Imacec economic activity index fell 1.0% year on year in August after dropping 1.5% in July. Copper mining plunged 17.4%. Colombia’s Davivienda manufacturing PMI, by contrast, rose to 54.6 from 54.3.
The Market’s Rules
At the October 1 close, the Ibovespa gained 0.46%, while Mexico’s IPC fell 0.97%, Chile’s IPSA slipped 0.56% and Argentina’s Merval dropped 2.15%. The briefing described Brazil’s rise as a local rebound, not a regional signal. A separate cross-market board on October 2 listed Mexico’s S&P/BMV IPC down 0.60%, Chile’s S&P IPSA down 0.56%, Colombia’s MSCI COLCAP down 0.75%, and Peru’s BVL S&P Perú down 0.13%.
The briefing said the stronger dollar was a headwind for regional currencies and local-currency bonds. Its October 1 close table listed USD/BRL up 0.84%, USD/MXN up 1.26% and USD/CLP up 1.40%. Elevated oil prices supported exporters in Brazil, Colombia and Mexico; higher gold and silver supported mining in Peru and Mexico. Ordinary people’s economies show up here as costs and exposures, while the briefing’s main concern is where assets and currencies move next.
In Brazil, the briefing said the real began Friday under modest pressure after an overnight dollar move. It also flagged a high US 10-year yield. The US payrolls report, average hourly earnings and unemployment rate were due at 09:30 Brasília time on October 2; a softer jobs reading could ease dollar pressure, while a stronger one could increase it.
No Grassroots Response in the Briefing
The material reports no direct action, mutual aid or community-organized response to the economic pressures it describes. It offers no electoral or legislative remedy, either. Instead, it tracks official indicators, tax receipts, market prices and forecasts. IMEF linked a slight improvement to public investment in physical works rising between April and June, very probably because of the football World Cup, and to computer-equipment exports that grew 200% through July. It said most inputs came from Asia and local value added was low.
IMEF identified the review of the USMCA as the main exposure. It reported public construction spending fell 13% from June to July and said rigid spending and rising pension costs increased the chance of a sovereign credit-rating cut. It expected the Bank of Mexico to hold its interest rate for the rest of the year and said inflation retained upside risk, mainly from services. The briefing’s final horizon was another round of official measurements: Brazil’s industrial-production data was due at 09:00 Brasília time, and the October IMEF PMI reading was due in early November.