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MEXICO: Banorte Expecting Another Split Vote, Heath’s Bias Uncertain

MEXICO
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  • Banorte are in line with consensus, expecting a 25bps cut from Banxico this week. In addition, they believe the vote will again be split, given that Irene Espinosa will vote against the cut.
  • However, Banorte suggest Deputy Governor Heath’s bias on this occasion is more uncertain, considering comments in recent weeks where he stated that “...the moment when we can start lowering rates more systematically is just around the corner...”.
  • On the contrary, Banorte believe that Governor Victoria Rodríguez, Galia Borja, and Omar Mejía will continue to push for lower rates given further improvements regarding inflation, as well as signs of a slowdown in economic activity.
  • Banorte also highlight the most recent Fed decision will help justify further easing from the Banxico committee is the start of the Fed’s easing cycle in the US, providing the committee with relevant room for manoeuvre in terms of the relative stance.
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  • Banorte are in line with consensus, expecting a 25bps cut from Banxico this week. In addition, they believe the vote will again be split, given that Irene Espinosa will vote against the cut.
  • However, Banorte suggest Deputy Governor Heath’s bias on this occasion is more uncertain, considering comments in recent weeks where he stated that “...the moment when we can start lowering rates more systematically is just around the corner...”.
  • On the contrary, Banorte believe that Governor Victoria Rodríguez, Galia Borja, and Omar Mejía will continue to push for lower rates given further improvements regarding inflation, as well as signs of a slowdown in economic activity.
  • Banorte also highlight the most recent Fed decision will help justify further easing from the Banxico committee is the start of the Fed’s easing cycle in the US, providing the committee with relevant room for manoeuvre in terms of the relative stance.