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Goldman Sachs Watching Banxico Minutes For Clues On March Rate Cut

  • Given the dovish shift in Banxico’s forward guidance, Goldman Sachs believe that March will be a live meeting for a rate cut, although they note that there isn’t any clear pre-commitment to cut then. As such, they will be looking for any discussion in the minutes around the conditions that would lead to a cut in March and how many of the five directors would be open to that.
  • GS will be looking for any discussion about the implications for monetary policy of softer Q4 real activity, against a backdrop of a tight labour market and positive output gap. They expect the MPC to note that domestic activity slowed more than anticipated in Q4, but that the labour market remains strong.
  • They will also be watching for discussion about the implications for monetary policy of the recent hawkish signals from the Fed and increase in dollar yields. On inflation, GS expect the minutes to acknowledge progress on the disinflation front, while still noting challenges from sticky services inflation.

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