Low inflation keeps Mexican October retail sales strong

Mexican retail sales for the month of October are expected to drop modestly by market consensus to come in at 4.9 year on year, while previous month's value stood at 5.2.

The consumption growth is likely to continue to surprise this year due to low inflation. Once the effect of low inflation grows early next year, acceleration in private consumption spending will need support from the labour market.

"Based on our October projection (SGe: 5.9% yoy, 0.7% mom), retail sales growth will average a strong 5.3% yoy YTD, compared with 2.7% in 2014", says Societe Generale in a research note.