May 12, 2022 16:44 GMT
- Around 90 minutes out from the Banxico rate decision, where a 50bps move is consensus. A further deterioration in the inflation outlook is expected to prompt another upward revision to CPI forecasts at this meeting. A sharper than expected upward revision to forecasts could prompt a small number of policymakers to opt for a 75bps hike this month, but they’re expected to be among the minority.
- Full preview including summary of sell-side views can be found here: https://marketnews.com/mni-banxico-preview-may-202...
- Headed into the meeting, USD/MXN is lower on the day - trading just above the Wednesday lows of 20.2282 and off the first resistance at 20.6378, the Apr 28 high. Attention has been on the potential for a stronger recovery, and the recent bounce off the May lows is encouraging for bulls.
- 20.6378 is the key short-term resistance and bull trigger. A break would set the scene for a climb towards 20.8028, 61.8% of the downleg between Mar 8 - Apr 4. A resumption of bearish activity would instead expose key support at 19.7274, Apr 4 low.