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MEXICO: Further Analyst Views On Bi-Weekly CPI / Banxico Rate Decision

MEXICO
EM BulletMexicoBulletEmerging Market NewsNorth America
  • HSBC thinks that while the H1 Jan CPI reading could be supportive for Banxico's Board members who are considering a 50bp rate cut in February, a soft Q4 GDP print and a resilient MXN amidst tariffs risks will prove key to support this view ahead of the Feb 6 Banxico decision. Although they see intentions to go for a 50bp rate cut in February, any materialisation of tariff risks could result in the Board maintaining a 25bp pace. Their base case remains for a 50bp cut in February and an end-2025 policy rate of 8.0%.
  • JP Morgan acknowledges that inflation has evolved better than they expected last year but they firmly believe that underlying risks continue to point toward structurally higher inflation, contrary to cyclical, more benign, conditions. They continue to eye a 25bp cut from Banxico on Feb 6, but next week’s Annual Monetary Program from Banxico and the Fed statement and bilateral tensions with the US will help determine whether the Board finally decides to shift gears.
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  • HSBC thinks that while the H1 Jan CPI reading could be supportive for Banxico's Board members who are considering a 50bp rate cut in February, a soft Q4 GDP print and a resilient MXN amidst tariffs risks will prove key to support this view ahead of the Feb 6 Banxico decision. Although they see intentions to go for a 50bp rate cut in February, any materialisation of tariff risks could result in the Board maintaining a 25bp pace. Their base case remains for a 50bp cut in February and an end-2025 policy rate of 8.0%.
  • JP Morgan acknowledges that inflation has evolved better than they expected last year but they firmly believe that underlying risks continue to point toward structurally higher inflation, contrary to cyclical, more benign, conditions. They continue to eye a 25bp cut from Banxico on Feb 6, but next week’s Annual Monetary Program from Banxico and the Fed statement and bilateral tensions with the US will help determine whether the Board finally decides to shift gears.