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.