LatAm Brief: US Retail Sales may give clues on size of Fed rate cut

17 SEPT 11:21GMT: The DXY found support at the 100.600 handle ahead of the second half data slate which brings US Aug Retail Sales (-0.2% m/m f/c from 1.0% prior), NY Fed Services Business Activity (1.8% prev) Aug Industrial Production (0.2% f/c from -0.6%), Business Inventories (seen unchanged at 0.3%) & NAHB Housing Index (41 f/c vs 39 prior). Market participants are now looking forward to Wednesday's FOMC interest rate decision where the general consensus is for a 25bps cut although there has been mounting expectations & predictions for a 50bps reduction. Today's US retail sales outturn may give further clues on that score. USD/MXN found support at the 19.20 handle and has been rising since. While USD/CLP may be firmer at the open. Still reports show investors has piled money into ETFs that buy EM bonds amid optimism that developing nation debt will get a boost from a highly anticipated Fed rate cut. USD/BRL may also be firmer at the open ahead of Brazil's interest rate decision tomorrow whereby we expect the BCB to hike rates by 25bps to 10.75%. FinMin haddad expressed that international interest rates will be reduced and the BCB will need to consider this in their rate decision, adding that inflation is not out of control (via Bbg). Still to come in the US, Retail sales, NY Fed services Business Activity (12:30GMT), Indust/Manuf Prod (13:15GMT), Business inventories & NAHB Housing market index (14GMT).

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