Mexico: A surprisingly widespread recovery in Q1 – Wells Fargo

By FXStreet Following GDP data from the first quarter in Mexico, analysts from Wells Fargo, explained that the economy has surprised to the upside and that the sustainability of the Q1 performance will depend on the an improvement of the US economy for the rest of the year.

Key Quotes:

“According to preliminary estimates, the Mexican economy grew a stronger-than-expected 0.8 percent in Q1 2016. Versus Q1 of last year, it grew 2.9 percent, seasonally adjusted.”

“The most important takeaway from this release, which is preliminary and does not have the normal details of a full-fledged release, is that the recovery in economic activity has been widespread.”

“Perhaps what surprised the most during Q1 was that analysts had discounted further weakening in economic activity during this year. This result will more than likely make them rethink the forecast for this year.”

“The sustainability of the first quarter performance by the Mexican economy will depend on an improvement of the U.S. economy during the rest of the year. The slowdown in automobile demand in the U.S. will continue to put some limit to this year’s Mexican industrial sector and overall economic performance.”

“Furthermore, the improvement in petroleum prices, while still bad for the Mexican fiscal sector, …read more

Source:: FX Street