CANADA TO PUBLISH FISCAL UPDATE ON DEC. 16

MNI BRIEF: Inflation Expectations Tick Higher - NY Fed

MNI BRIEF: China Passenger Car Sales Up In November Y/Y

MNI BRIEF: Mexico Inflation Down To 4.55% In November

MNI China Daily Summary: Monday, December 9

MNI BRIEF: China To Strengthen Policy Easing In 2025: Poliburo

MNI:US OCT WHOLESALE INV 0.2%; SALES -0.1%

EZ/UK Bond Supply Calendar: Austria, UK Auction on Tuesday

MNI BRIEF: China Nov CPI Slows To 5-Month Low Of 0.2% Y/Y

MNI EXCLUSIVE: EU-Mercosur Deal Close, But Likely Short-Lived - Officials

AUSTRALIA: 2025 Election Outcome Looking More Uncertain According To Newspoll

© 1982-2024 MNI. All rights reserved.
Terms | Privacy
Log Out
Free Trial

JPMorgan Say Risk Of Rates On Hold For Longer Is Increasing

MEXICO
  • JPMorgan do not expect a change in its current narrative, with the board unanimously voting to keep rates on hold at 11.25%. As the economy continues to deliver positive surprises and economic slack continues to shrink, pressures on core gauges linger and the board has opted out from signalling the start of the easing cycle this year—a view that JPM once entertained.
  • JPM believe the same hawkish guidance will linger, key to understanding that the window for cuts should be later rather than sooner. They still expect March but risk is clearly tilted toward 2H24.
  • Headline inflation has gradually corrected since the highs observed last year but mostly on the back of non-core inflation components and as producer prices have reflected a meaningful improvement in supply chains and a stronger currency. But with core services and some other alternative measures of underlying inflation still struggling to return to pre-pandemic levels, JPM do not foresee a material change in the hawkish narrative adopted in the summer, even with the real ex-ante policy rate close to 7%.
  • Some members have suggested that resuming hikes is not a zero-probability scenario as the board continues to assess the impact from the 725bp of hikes since mid-2021; while JPM still attach a low probability to nominal rates going above 11.25% considering that headline inflation has now eased to 4.4% (from a maximum of 8.8% in 3Q22), they believe that going forward inflation will remain stuck in a rut, which suggests the risk of rates on hold for longer is increasing.
  • JPM expect a unanimous decision but with the board signaling unease with respect to the balance of risks to both inflation and growth.
BulletEM BulletEmerging Market NewsHomepage
BulletEM BulletEmerging Market NewsHomepage

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.