MNI China Daily Summary: Thursday, April 22

MNI BRIEF: China To Quicken Resolving Local Debt Risks

RPT-MNI INTERVIEW: ECB's Wunsch Sees At Least Two Cuts By Dec

MNI BRIEF: Brazil CenBank Faces Greater Uncertainty - Campos

MNI: PBOC Conducts CNY2 Bln Via OMO Mon; Liquidity Unchanged

CHINA PBOC INJECTS CNY2 BILLION VIA 7-DAY REVERSE REPOS MON

EZ/UK T-Bill Calendar: 3/6-Month ATB Auction on Tuesday

EZ/UK Bond Supply Calendar: EU, FI Synds; IT, DE Auctions Tues

MNI: CANADA MAR INDUSTRIAL PRICES +0.8% MOM; EX-ENERGY +0.8%

RPT-MNI: Canada Sticks To Fiscal Anchors, Spends Chunk Of Windfall

MNI BRIEF: Poilievre Calls QE 'Scam' And Would Limit BOC Remit

MNI: Growth Drag From Net Zero Carbon Goal Can Be Offset-OECD

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Deutsche Bank Says Door For Rate Reductions Should Only Open in Q4

MEXICO
  • Overall, while headline inflation seems to have peaked and the monthly data does show a decline in annual core inflation, it seems to us that the risks of a very slow convergence of inflation towards the central bank target are significant. And the inflation data of the services sector is also an indicative of relatively persistent pressures that should be taken seriously by Banxico if it is to guarantee the convergence of inflation to its 3% target over the next 2 years.
  • Under the current conditions, Deutsche Bank expect Banxico to continue to follow the Fed at least while the US central bank continues to hike the Fed Funds Rate.
  • They expect that Banxico will increase the overnight rate by 25bp when it meets this week and again in March. This will bring the policy rate to 11% by the end of Q1 ’23. And assuming Deputy Governor Heath’s view regarding how long the policy rate is to remain at its terminal level is adopted by the board, the door for reductions of the policy rate should only open by Q4 ’23 when Deutsche anticipate two 50bp cuts of the overnight rate to bring it to 10% by year-end.
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