Both the Mexican and Brazilian manufacturing PMIs fell in July but the similarities end there. In Brazil, the PMI has a fairly good relationship with actual activity data and suggests that the improvement in industrial production in the first half of the year may prove short-lived. By contrast, the Mexican PMI is not a particularly good indicator of output. Instead, we would put more weight on the improvement in US business surveys, which are consistent with a pick-up in Mexican industry later this year.
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