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MEXICO: Analyst Comments On CPI Inflation Ahead Of Banxico Meeting

MEXICO
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  • HSBC notes that beyond the main metrics, the overall picture was benign as price increases in H1 September were moderate across the board, with a gradual fading of pressures in some components that had experienced shocks in previous readings. Core inflation remains anchored by tradable goods, while some service sector prices are still under upside pressure. Overall, HSBC says these data should prove supportive to their call for a unanimous 25bp rate cut tomorrow.
  • JP Morgan says that the details within core inflation in H1 September heed for a bit more of a cautious reading, with services inflation continuing to display an uncomfortable behaviour and an uptick in non-food goods inflation. Though core prices rose as expected, services prices rose more than JPM thought. The downward pull came from processed food prices, which, surprisingly, were stable in the first half of the month. Overall, however, the progress made on disinflation should allow Banxico to cut the policy rate tomorrow.
  • Scotiabank believes that in the coming policy meeting, the board could highlight these better-than-expected data and deliver a dovish guidance, as inflation in agriculture has been seen considerably down, while merchandise and services are slowly declining. They believe these results increase the chances of a 50bp cut, although the consensus and their baseline scenario remains a 25bp move.
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  • HSBC notes that beyond the main metrics, the overall picture was benign as price increases in H1 September were moderate across the board, with a gradual fading of pressures in some components that had experienced shocks in previous readings. Core inflation remains anchored by tradable goods, while some service sector prices are still under upside pressure. Overall, HSBC says these data should prove supportive to their call for a unanimous 25bp rate cut tomorrow.
  • JP Morgan says that the details within core inflation in H1 September heed for a bit more of a cautious reading, with services inflation continuing to display an uncomfortable behaviour and an uptick in non-food goods inflation. Though core prices rose as expected, services prices rose more than JPM thought. The downward pull came from processed food prices, which, surprisingly, were stable in the first half of the month. Overall, however, the progress made on disinflation should allow Banxico to cut the policy rate tomorrow.
  • Scotiabank believes that in the coming policy meeting, the board could highlight these better-than-expected data and deliver a dovish guidance, as inflation in agriculture has been seen considerably down, while merchandise and services are slowly declining. They believe these results increase the chances of a 50bp cut, although the consensus and their baseline scenario remains a 25bp move.