June 06, 2024 11:20 GMT
Analysts Expect 25bp Interest Rate Cut This Month
MEXICO
- The Mexican peso stabilised yesterday, with USDMXN falling by 1.9% as it pulled back from the post-election spike, amidst some renewed appetite for long positions. The pair is currently trading close to initial support of 17.5462. Below this, support to watch lies at 17.0912, the 20-day EMA. Meanwhile, President-elect Sheinbaum said she is working on forming her cabinet and will provide information in the coming weeks. She said her victory in the presidential election was assured in what was a free and democratic process, despite demands for a recount of 80% of the votes from opposition leader Xochitl Galvez.
- Last night, the latest Banamex survey showed that analysts still expect Banxico to cut its policy rate by 25bp at the June 27 MPC meeting, despite the recent pressure on the peso. The policy rate is also still expected to reach 10.0% by the end of this year, but the end 2025 forecast was raised to 8.0%, from 7.88%. Analysts also see USDMXN at 18.00 at the end of this year (vs. 17.9 in the previous survey) and 18.87 at end 2025 (vs. 18.66 previously).
- Today, vehicle production and exports data for May will be released at 1300BST(0800ET). Production rose to 358,575 and exports increased to 289,756 in April.
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