LatAm Brief: Banxio's Ceja says rate adjustments will be "gradual"

29 AUG 11:45GMT: The DXY climbed to a 6-day high of 101.357 even after hours on Wednesday, Fed's Bostic said inflation still has some distance to fall, employment is still quite strong historically & he would rather err on the side of caution regarding rate cuts, voicing that "I don't want us to be in a situation where we cut and then we have to raise rates again" (via Bbg). The second half data agenda today brings US Q2 annualised GDP (unch 2.8% f/c), GDP Price Index (steady 2.3% expected) & Personal Consumption (2.2% f/c from 2.3%). Initial weekly jobless claims are f/c to be unmoved at 232k. Elsewhere in the markets, the UST yields have tightened slightly, with the 10yr yield falling to a session low of 3.81% and USD/LatAms may be mixed at the LatAm open on Thursday. USD/MXN has been rebounding from its session low of 19.5687 after Banxico's Gov Ceja expressed that future adjustments to their policy rate "will be gradual" and will depend on available information regarding the inflationary environment as the economy is in a "disinflationary process," while the perspective of the economic slowdown continues and domestic activity is seeing marked weakness. Banxico also lowered its 2024GDP f/c to 1.5% (from 2.4%) and lowered 2025 f/c to 1.2% from 1.50% prior. Inflation f/c were unchanged (via Bbg). USD/CLP may also befirmer at the open ahead of Chile's unemployment rate data for July which is expected to rise to 8.50% from 8.30% prior (13GMT). USD/BRL may be softer at the open amid fresh gains on iron ore, even though peers appear to be mixed against the dollar. BCB director Galipolo was chosen by Pres Lula to be the next leader of the BCB when BCB's Neto steps down in in Dec. Galipolo has been using a hawkish tone in his latest remarks as a strategy for a smooth transition (via Bbg). On the data front another set of inflation data out of Brazil rises, highlighting more underlying inflationary pressures.

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