Remember "Sticks and Stones"? It’s that old English child’s rhyme. The saying has persuaded many a childish victim of name-calling.

Don’t worry. Ignore that taunt! Refrain from physical retaliation. Be calm. Stay good-natured.

“Sticks and stones may break my bones, but words will never harm me.”
 

In the Global Week Ahead, this rhyme proves a patent falsehood. Tweeting “Build the Wall” and “Reject NAFTA” taunts galore, key macroeconomics inside Mexico have indeed been damaged by U.S. words alone.
 

When words emanate from the President of the United States, it changes everything. The direct economic forces these imply, and indirect uncertainty it incorporates, ripple immediately thru forward-looking global markets.
 

They wreak monetary havoc upon its victims.
 

Case in point: the actions of the Central Bank of Mexico (known as Banxico). Mexico’s first policy rate decision since Dec. 15th -- when it hiked 50 basis points -- is delivered this Thursday.
 

Banxico’s policy rate sits at 5.75%. Consensus sees 50 basis points in tightening sometime this quarter. The median forecast sees a 6.75% Banxico overnight rate (100 basis points in tightening) by yearend. Analysis by the Bank of Nova Scotia says still more pressures build late in 2017. These force this key Mexican rate to 7.5% by 1H-2018.
 

That’s 175 bps, equal to seven more 25 basis point hikes.
 

What key issue faces Mexico’s central bankers? -- A need to offset Mexican peso depreciation.
 

Think of this in the context of an annual consumer price inflation target of +3.0%. Given import content built into Mexican consumption, the problem with relentless Trump tweets keeps building.
 

Here’s the evidence. On Thursday, Mexico’s consumer price inflation (CPI) could get to +4.69% from 3.36% y/y. The m/m rise lifts to +1.67%, up from +0.46 m/m the prior month. This is mostly a Mexican peso effect. More expensive imports into the country flow directly to the CPI.
 

Since Banxico’s last monetary policy decision, the Mexican peso has depreciated against all other major and semi-major currencies. In short, the previous December monetary belt-tightening slowed, but did not negate Mexican peso depreciation.
 

Banxico’s current Governor, Augustin Carstens, leaves his lofty post to become the still-loftier head of the Swiss-based Bank for International Settlements, known in the economist trade as “the BIS,” this July.
 

He recently remarked that the Mexican peso is undervalued. Then, he guided markets. Banxico will “look through a temporary rise of inflation and we will not impose excessive costs on the economy. But we have to be very watchful.”
 

The Bank of Mexico’s governor makes it sound like the causes behind this depreciation of the Mexican peso will recede. Let’s hope they do.
 

In another important global theater, five central banks in Asia set monetary rates this week. Their leaders will comment on current global risks, too.
 

Consensus opines the Reserve Bank of India (RBI) will cut its policy rate. The Reserve Bank of Australia (RBA), the Reserve Bank of New Zealand (RBNZ), the Bank of Thailand (BoT) and Bangko Sentral ng Pilipinas (BSP) should hold their respective policy rates steady.
 

On Friday, Mainland China offers up export-import trade growth statistics. This data have added trading implications.
 

Top Zacks #1 Rank (STRONG BUY) Large Cap Stocks—

Alibaba Group (BABA Quick QuoteBABA - Free Report) : This Mainland China company operates online and mobile marketplaces in retail and wholesale trade, as well as cloud computing and other services. It provides technology and services to enable consumers, merchants and other participants to conduct commerce in its ecosystem.

Daimler AG : This German company has a number of auto/truck businesses, such as Mercedes-Benz Cars, Daimler Trucks, Daimler Financial Services, Mercedes-Benz Vans and Daimler Buses. It is a globally leading producer of premium passenger cars and the largest manufacturer of commercial vehicles in the world.

Texas Instruments (TXN Quick QuoteTXN - Free Report) : This U.S. multi-national has evolved into a global semiconductor company. It is also one of the world's leading designers and suppliers of digital signal processors and analog integrated circuits. These are the engines driving the digitization of electronics.

Each stock also carries a long-term Zacks VGM score of B, which represents a BUY rating.

Key Global Macro—

All major asset market signs suggest the same. The post-U.S. Presidential election “risk-on” trade looks mature, if not over.

• The S&P 500 has done little since mid-December.
• The 10-year U.S. Treasury rate has moved sideways, too.
• The broad trade-weighted U.S. dollar has been depreciating in early 2017 -- in a reversal of some appreciation seen from October thru December. That leg took the U.S. dollar to strength not seen in 14 years.
   

Risk sits at a fork in the road. Traders wait for good U.S. policy actions to excite — beyond what has been already priced in — and hope bad U.S. policy decisions get checked and balanced.

Abe Visit: Japanese Prime Minister Shinzo Abe visits Washington D.C. on Friday to pursue deeper trade ties with a U.S. run by a new President Trump.

Brexit Debate: After passing its first reading in the House of Commons last week, the Brexit bill goes to the Committee stage. Members of Parliament have another chance to debate and propose amendments. The Financial Times says these are unlikely to pass. The Commons votes a final time before sending the bill to the House of Lords.

U.S. Earnings: More than half of S&P 500 companies have reported quarterly results. The week ahead shows us earning reports from 80 more. Notable reports include Hasbro, Tyson Foods, Michael Kors, GM, Disney, Whole Foods, Yum! Brands, Kellogg, and Expedia.

On Monday, Australia reports its latest job additions (the prior was negative) and retail trade figures (expectations are for +0.5% m/m).

Indonesia looks to grow GDP by +4.9% y/y.

The Fed’s Harker speaks in San Diego.

On Tuesday, the Reserve Bank of Australia (RBA) should keep its policy overnight rate at 1.5%.

Brazil’s FGV Inflation rate should be +6.2% y/y, down from +7.18% y/y.

Russia’s CPI should be up +5.1% y/y, lower than the prior +5.4% y/y rate.

On Wednesday, the Bank of Thailand (BoT) should set its overnight repo rate. The prior was at 1.5%.

India’s central bank should take its policy repo rate to 6% from 6.25%.

The National Bank of Poland (NBP) should keep its base rate at 1.5%.

On Thursday, the Reserve Bank of New Zealand (RBNZ) should keep its policy rate at 1.75%.

The central bank in the Philippines (BSP) sets its overnight reverse repo rate. It is at 3% now.

U.S. initial claims look super low at 246K.

Mexico’s Consumer Price Inflation (CPI) could get to 4.69% from 3.36% y/y. The m/m rise looks to be +1.67%, up from +0.46 m/m in the prior month.  This is a Mexican peso effect (more expensive imports are flowing into the CPI).

The Fed’s Bullard speaks in St. Louis and Evans speaks in Chicago.

On Friday, China reports its latest imports. The data shows it could be +14.1% y/y this time around. China’s exports should be +4.4% y/y.

China’s trade balance should be going to $55 billion from $40.7 billion.

In comparison, India’s trade balance is a -10.4 billion.

The visible trade balance in the U.K looks to be -12.16 billion British pounds.

Canada’s unemployment rate should be 6.9%.

The University of Michigan consumer sentiment index should be 98.5.

On Saturday, the Fed’s Fischer speaks in the U.K.