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MEXICO: Analyst Views On September CPI Inflation, Ahead Of Banxico Minutes

MEXICO
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  • Scotiabank notes that the lower-than-expected CPI print was mainly due to the drop in the most volatile components, especially fruits and veg, which were affected by weather and local supply chain problems. Given the recent hurricanes, there could be some rebound in coming weeks. However, core inflation decelerated further due to the slowdown in goods prices, although services inflation remains high. Overall, Scotiabank expects Banxico to maintain a cautious stance and continue cutting by 25bp for the two meetings remaining this year.
  • JP Morgan says that marginal data, both for H2 Sept, which showed stability, and early high frequency data for this month, which show some firming, suggest raw food prices have stabilised if not edged back up. Meanwhile, the pace of the decline in core inflation is becoming slower. Services price gains have re-accelerated and are running at a 0.4%m/m, sa clip.
  • HSBC thinks that downside surprises across the board are the main takeaway from the data, with core disinflation prevailing and previous shocks within non-core continuing to fade. Overall, the data and the perception of improved inflation dynamics validate the initial discussions on the rate cutting pace ahead within Banxico's Board. The latter is key to monitor in the MPC minutes which are due at 1600BST(1100ET) today.
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  • Scotiabank notes that the lower-than-expected CPI print was mainly due to the drop in the most volatile components, especially fruits and veg, which were affected by weather and local supply chain problems. Given the recent hurricanes, there could be some rebound in coming weeks. However, core inflation decelerated further due to the slowdown in goods prices, although services inflation remains high. Overall, Scotiabank expects Banxico to maintain a cautious stance and continue cutting by 25bp for the two meetings remaining this year.
  • JP Morgan says that marginal data, both for H2 Sept, which showed stability, and early high frequency data for this month, which show some firming, suggest raw food prices have stabilised if not edged back up. Meanwhile, the pace of the decline in core inflation is becoming slower. Services price gains have re-accelerated and are running at a 0.4%m/m, sa clip.
  • HSBC thinks that downside surprises across the board are the main takeaway from the data, with core disinflation prevailing and previous shocks within non-core continuing to fade. Overall, the data and the perception of improved inflation dynamics validate the initial discussions on the rate cutting pace ahead within Banxico's Board. The latter is key to monitor in the MPC minutes which are due at 1600BST(1100ET) today.