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Banxico Still On Course To Ease In Q1, Unemployment Data Due

MEXICO
  • Yesterday’s inflation and activity data keep the door open for Banxico to start its easing cycle later this quarter. While the higher-than-expected headline print may keep Banxico cautious for now, policymakers should take encouragement in the further decline in core inflation to its lowest since Aug-21. JP Morgan expect Banxico to turn neutral at their February meeting, emphasising core improvements and softer growth, and see a compelling case for easing in March.
  • Today, the national statistics agency releases December unemployment data at 1200GMT(0700ET), which is expected to have dropped to 2.61%, from 2.71% previously. Elsewhere, key US Q4 GDP growth data will be published at 1330GMT(0830ET), ahead of next week’s FOMC meeting. Separately, Bloomberg are reporting that Audi workers in Mexico are on strike over wages for the first time since 2016. The union apparently sought a 15.5% wage increase, while Audi proposed 6.5%.

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