Free Trial
AUDUSD TECHS

Key Resistance Exposed

US STOCKS

Late Equity Roundup: Bounce off Late Reversal

US

Late Corporate Credit Update

US OUTLOOK/OPINION

CIBC In Line For Core CPI, Above Consensus For Headline

EURJPY TECHS

Sights Set On Key Resistance

Real-time Actionable Insight

Get the latest on Central Bank Policy and FX & FI Markets to help inform both your strategic and tactical decision-making.

Free Access

Banorte Says Factors Driving 75BP Hike Identical To September Meeting

MEXICO
  • Banorte expect Banxico to increase the reference rate to 10.00%, which implies a fourth consecutive 75bps increase, validating their expectation since late September. Factors driving the decision would be practically the same as in the last meeting, noting: (1) The relative monetary stance with the Fed; and (2) additional inflationary pressures.
  • A change of this magnitude would validate the view of a predictable and prudent central bank, which Banorte believe has been key to foster stability in local assets in an environment of higher global financial volatility. They consider that the vote will be unanimous.
  • Banorte believe the decision will reinforce the hawkish tone from the institution, despite the possibility of opening the door to a moderation in the pace and adjustments to the forward guidance, similar to the Fed. This would be consistent with the signals from members over the need to debate which the adequate level of the terminal rate and the space left to reach it.
  • In their view, this could indicate that future moves might be smaller. With this in mind, Banorte reiterate their call of a +50pbs hike in December, taking the rate to 10.50% at the end of the year, with an additional cumulative tightening of +50bpbs in 1Q23, resulting in a 11.00% terminal rate for this cycle.
213 words

To read the full story

Why Subscribe to

MarketNews.com

MNI is the leading provider

of news and intelligence specifically for the Global Foreign Exchange and Fixed Income Markets, providing timely, relevant, and critical insight for market professionals and those who want to make informed investment decisions. We offer not simply news, but news analysis, linking breaking news to the effects on capital markets. Our exclusive information and intelligence moves markets.

Our credibility

for delivering mission-critical information has been built over three decades. The quality and experience of MNI's team of analysts and reporters across America, Asia and Europe truly sets us apart. Our Markets team includes former fixed-income specialists, currency traders, economists and strategists, who are able to combine expertise on macro economics, financial markets, and political risk to give a comprehensive and holistic insight on global markets.
  • Banorte expect Banxico to increase the reference rate to 10.00%, which implies a fourth consecutive 75bps increase, validating their expectation since late September. Factors driving the decision would be practically the same as in the last meeting, noting: (1) The relative monetary stance with the Fed; and (2) additional inflationary pressures.
  • A change of this magnitude would validate the view of a predictable and prudent central bank, which Banorte believe has been key to foster stability in local assets in an environment of higher global financial volatility. They consider that the vote will be unanimous.
  • Banorte believe the decision will reinforce the hawkish tone from the institution, despite the possibility of opening the door to a moderation in the pace and adjustments to the forward guidance, similar to the Fed. This would be consistent with the signals from members over the need to debate which the adequate level of the terminal rate and the space left to reach it.
  • In their view, this could indicate that future moves might be smaller. With this in mind, Banorte reiterate their call of a +50pbs hike in December, taking the rate to 10.50% at the end of the year, with an additional cumulative tightening of +50bpbs in 1Q23, resulting in a 11.00% terminal rate for this cycle.