In Mexico, a 0.26% m/m print is expected for August, which would imply a y/y inflation rate close to 2.6%, confirming inflation below the target and supporting the view that Banxico should not be in any rush to hike rates.



As such, it is still found that receiving the short end of the TIIE curve attractive, as the probability of an FOMC September lift-off has decreased and economic activity remains below potential.



In addition, the 2016 budget will be presented on Tuesday. According to Barclays.



A cut is expected in spending (mainly due to oil revenues) that should bring down the deficit from 1.0% in 2015 to 0.5% in 2016.



The Federal Government will correctly accommodate the shortfall coming from lower oil prices without compromising Mexico's rating, although the high correlation of MXN and oil prices should prevail in the months to come.



USD/MXN is likely to consolidate at current levels for the week ahead.