UPDATE 2-Mexico factory exports dip in June for 2nd month
* Factory exports dip 1.04 pct in seasonally adjusted terms * Adjusted June trade deficit narrows By Michael O'Boyle MEXICO CITY, July 26 (Reuters) - Mexican manufactured exports dipped in June for the second straight month as a global slowdown weighed on demand, backing expectations the central bank is unlikely to raise interest rates due an inflation spike. Solid demand in the United States shielded Mexico in the first part of the year from a wider global slowdown that pushed Brazil to slash interest rates. But a string of data has suggested Mexico's economy is losing steam. Factory-made exports fell 1.04 percent last month from May, the national statistics agency said on Thursday, while non-oil imports slipped 0.89 percent in June versus May. "Things are looking bad. This is confirming the slowdown in external demand and the weakness of internal demand," said Arturo Vieyra, an economist at Banamex in Mexico City. "The impact of the slowdown in the United States is becoming more clear," he said. Slowing job growth in the United States is crimping demand for Mexican exports. Mexico ships nearly 80 percent of its exports to its northern neighbor. Weaker growth is seen offsetting concerns about a rise in inflation to a 1-1/2-year high in early July. The central bank warned last week of the risk was growing of a "severe" global downturn. Yields on short-term Mexican interest rate swaps were little changed after the data as investors stuck to tentative bets that policymakers could lower their benchmark rate from 4.50 percent next year. Thursday's trade data showed manufactured exports grew 4.4 percent in June compared with the same month last year, but that was down from a 10.4 percent annual rate seen in May. Mexico posted its third monthly trade deficit in a row in June, with a $169.5 million deficit in adjusted terms. In non-seasonally adjusted terms, Mexico posted a trade surplus of $602 million. Data on Wednesday showed that Mexico's economy slipped in May from April due to flagging factory output and a contraction in the services sector.
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