Brazil’s manufacturing PMI sank to 44.8 in September, its weakest reading since April 2023, while Mexico’s climbed to 50.3. A regional market briefing dated Friday, October 2, reported that split alongside declining activity in Chilean copper mining and higher inflation in Lima.
Factories and Public Spending
Brazil’s S&P Global manufacturing PMI fell from 46.3 to 44.8. Mexico’s S&P Global reading rose from 49.8 to 50.3, but INEGI’s business confidence index stayed below 50 for its 19th consecutive month, ticking up only from 48.3 to 48.4.
A separate survey by the Mexican Institute of Finance Executives, or IMEF, showed a slightly different picture. Its Manufacturing Indicator gained 0.1 points, reaching 50.0 in September from 49.9 in August. IMEF called the results “mixed signals” and said there wasn’t enough evidence to confirm a broad recovery.
The IMEF report tied the slight improvement to higher public investment in physical works between April and June, very probably because of the football World Cup, and to computer-equipment exports. Those exports rose 200% through July, IMEF said, while most inputs came from Asia and local value added was low.
Public construction spending dropped 13% from June to July. IMEF also said rigid spending and rising pension costs raised the risk of a sovereign credit-rating cut. The Mexican finance ministry, SHCP, reported a January-to-August fiscal deficit of MXN 739 billion, about US$40 billion at 18.30 pesos per dollar, against MXN 1.015 trillion programmed.
Chile’s Imacec economic activity index fell 1.0% year on year in August, after a 1.5% decline in July. Copper mining plunged 17.4%. Peru’s INEI reported Lima annual inflation at 4.55% in September, up from 4.44% in August and above the central bank’s target range of 1% to 3%.
Markets, Currency and Revenue
Argentina’s tax agency, ARCA, reported September tax revenue of AR$21,359 billion, or AR$21.36 trillion, about US$14 billion at AR$1,525 per dollar. Revenue increased 38.3% in nominal terms, following about AR$20.5 trillion in August.
The market briefing’s October 1 close table put Brazil’s Ibovespa at 187,197, up 0.46%. Mexico’s IPC fell 0.97%, Chile’s IPSA lost 0.56%, and Argentina’s Merval dropped 2.15%. The briefing described Brazil’s gain as a local rebound, not a regional signal; the other main regional boards fell.
In Brazil, Vamos, described as a truck and machinery rental company, rose 4.7% on R$322 million turnover. Azzas, described as logistics and equipment, gained 7.0% on R$158 million, while retailer Casas Bahia climbed 8.2% on R$27 million. The briefing called the Azzas and Casas Bahia gains small-turnover moves. Turnover leaders included Itaú Unibanco at R$2,597 million, Petrobras preferred shares at R$1,697 million and Vale at R$1,867 million; activity centered on banks, oil and iron ore, the briefing said.
A stronger dollar weighed on regional currencies and local-currency bonds, according to the briefing. Higher oil prices supported exporters in Brazil, Colombia and Mexico, while higher gold and silver prices supported mining in Peru and Mexico. A firm dollar raises the local-currency cost of foreign debt and weighs on imported inflation.
Policy and Exposure
IMEF said public construction spending had fallen, while its services and commerce indicator stayed below 50 at 49.2. Its trend-cycle series slipped to 49.0, and its size-adjusted index fell to 48.5. The manufacturing trend-cycle series rose to 49.9, while its size-adjusted index lost 0.6 points to 51.9.
IMEF identified the review of the USMCA, the North American trade agreement, as Mexico’s main exposure. It said the Bank of Mexico was expected to keep its interest rate unchanged for the rest of the year and that inflation still faced upside risk, mainly from services. The October IMEF PMI reading was due in early November; official industrial-production data from INEGI would test the survey signal.
US payrolls, average hourly earnings and the unemployment rate were due at 09:30 Brasília time on October 2, the briefing said, with private payrolls expected to slow sharply. A softer US jobs reading could ease dollar pressure; a stronger one could intensify it. The briefing also identified Brazil’s Selic as its benchmark interest rate and said the US 10-year yield remained high.