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Banorte Expect Banxico To Hold Benchmark Rate At 11.00% For Longer

MEXICO
  • Considering the price dynamics so far, Banorte believe Banxico will no longer cut rates at its next meeting on June 27th. Moreover, they think the gradual approach will extend for the rest of the year, now expecting the rate at 10.50% by December’s close (previous: 10.00%), considering 25bps cuts in September and December.
  • In this regard, the market prices -3bps for June’s meeting and -30bps accumulated by year-end (Banorte: -50bps). Banorte suggest taking advantage of the wider ranges in Mbonos for short-term tactical trading operations. They reiterate their view favouring nominal rates vis-á-vis real rates for the rest of the quarter.

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