Free Trial

Citi Stand By Call For Initial 50BP Rate Cut

CHILE
  • Citi expect BCCh to begin easing in its July policy meeting, delivering a 50bps cut. Inflation has been trending down, with headline standing at 7.6% Y/y in June, below expectations at 7.9% per the latest Bloomberg survey.
  • Softer inflation makes a cut this week very plausible, with BCCh's July Expectations Survey showing that 47 out of 50 respondents expect a cut in July. Citi stand by their call for an initial 50bp move, though the median call stands at 75bps.
  • While Citi believe the risks lie toward a stronger 75bp cut, they do not believe BCCh would move to surprise the market with an even stronger move than the median call.
  • Going forward, Citi expect inflation to continue trending down through year end and reach target band in 1Q24, in line CB projections, which should allow BCCh to deliver up to 300bps in cuts this year. CLP carry is likely to remain worst in LatAm FX from here.

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.