CORRECTED-MNI: Fed's Hammack-Near Or At Time To Slow Rate Cuts

MNI BRIEF: Fed's Goolsbee Sees Rates Fair Bit Lower In A Year

CANADA JOBLESS RATE +6.8% VS FORECAST +6.6%, PRIOR +6.5%

MNI China Daily Summary: Friday, December 6

MNI: PBOC Net Drains CNY288.1 Bln via OMO Friday

MNI: PBOC Sets Yuan Parity Lower At 7.1848 Fri; -1.64% Y/Y

MNI: UNIV OF MICHIGAN CONSUMER SENTIMENT PRELIMINARY DEC INDEX 74.0

CANADA NOV IVEY PURCHASING MANAGERS INDEX 52.3 SA

EZ/UK Bond Supply Calendar: Austria, UK Auction on Tuesday

MNI EXCLUSIVE: EU-Mercosur Deal Close, But Likely Short-Lived - Officials

AUSTRALIA: 2025 Election Outcome Looking More Uncertain According To Newspoll

© 1982-2024 MNI. All rights reserved.
Terms | Privacy
Log Out
Free Trial

Banorte on Banxico: Conditions Clearly Set For Additional Tightening

MEXICO
  • Banxico to hike another 50bps as the inflation outlook has deteriorated further. In Banorte’s view, conditions are clearly set for additional tightening. Russia’s invasion of Ukraine has had adverse effects in both inflation and financial conditions, on top of already high challenges in both fronts. Banorte expect a hawkish tone among most members, despite being almost certain that the decision will not be unanimous, with Deputy Governor Gerardo Esquivel likely dissenting again.
  • On prices, annual inflation picked-up in February. Special attention should be given to the core, which maintains an upward trend.
  • While this had already been noticed, we believe that spillover effects from the war in Ukraine have further deteriorated the outlook. The most relevant for Mexico has been the sharp rise across several commodities, including food, metals, and energy. This will likely start to have direct and indirect effects on CPI as soon as the 1st half of March. While this should have a more meaningful effect on the non-core, we believe it is necessary for the central bank to maintain a decisive stance to avoid the propagation of second round effects – especially to the core– and additional upside risks to inflation expectations.
  • Banorte also expect a relevant increase in inflation forecasts. So far, inflation in Jan/Feb has averaged 7.2% y/y, which means that March should be no more than 6.35% to match Banxico’s 6.9%. On this point, Deputy Governor Jonathan Heath mentioned that it looks like a tall order, with inflation “overwhelming” again. The most significant changes will likely be in the short-term, including tweaks for the year-end print. The magnitude –along the ‘deteriorated’ balance of risks, according to the latest Quarterly Report– will help Banorte assess the probability of hikes of a similar magnitude in upcoming meetings.
BulletEM BulletEmerging Market NewsHomepage
BulletEM BulletEmerging Market NewsHomepage

To read the full story

Close

Why MNI

MNI is the leading provider

of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.

Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.