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Banorte on Banxico Minutes and Inflation Data Due Thursday

  • Banorte will focus on the outlook among members, especially in identifying those from new Governor Victoria Rodriguez in her first meeting. Moreover, they will analyse concerns about inflation, including current dynamics, forecast changes and the balance of risks.
  • It will also be important to see their views about the upcoming hiking cycle by the Fed and the relative policy stance.
  • Lastly, the assessment of economic activity, which at the margin looks more dovish, as well as financial markets. Banorte believe the document will provide greater clarity about the magnitude of the next move (in March). They are calling for a 25bps hike, albeit with risks for +50bps increasing.
  • Banorte expect inflation at 0.37% 2w/2w (previous: 0.39%), high vs. its 5-year average of 0.16%. They expect some of the adverse trends in recent periods to continue, especially at the core component, rising 0.39% (contribution: +29bps), as pressures remain pushing goods, although with services also picking up.
  • The non-core would be slightly lower at 0.30% (+8bps) and with these results, annual inflation would rise to 7.17% from 7.07% on average in January. Similarly, the core would extend higher to 6.48% (previous: 6.21%), highest since late 2001.

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