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Evening Edition – Industrial confidence declines in Brazil

May 28, 2019

Data released so far for 2Q19 indicate no substantial acceleration in economic activity ahead, after a disappointing 1Q19.

Talk of the Day

Brazil

According to FGV’s monthly industry survey, business confidence in the industrial sector decreased 0.7 p.p. to 97.2 in May. The breakdown shows a drop in the expectations component (-1.5 p.p.), while the current situation index moved sideways. Capacity utilization in the sector (NUCI) increased 0.8 p.p., to 74.7%. The print is slightly better than the preview released last week, in which industrial confidence fell 1.6 p.p., with drops in both the expectation and current situation components, and the NUCI increased only 0.3 p.p. Despite the small improvement, data released so far for 2Q19 indicate no substantial acceleration in economic activity ahead, after a disappointing 1Q19.

Tomorrow’s Agenda: FGV’s service confidence index for May will be released at 8:00 AM. On fiscal accounts, April’s central government primary budget balance will be published at 2:30 PM, for which we forecast a BRL 5.4 billion surplus. At the same time, the Central Bank will release April’s credit report.

Argentina

The General Confederation of Labor (CGT) called for a 24-hour strike on Wednesday (29), to protest against the economic and social policies from Macri's administration. The strike is expected to shut down public transportation, banks and a number of other services. This is the sixth national strike since Macri took office, in 2015.

Mexico

Tomorrow’s Agenda: At 4:00 PM, the Central Bank of Mexico (Banxico) will publish the quarterly inflation report (1Q19), with updates of its macro outlook on the Mexican economy, including revised forecasts for the main variables and probably more guidance on its future policy decisions.

 



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