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MEXICO: Bi-Weekly CPI Inflation Due Tomorrow

MEXICO
EM BulletMexicoBulletEmerging Market NewsNorth America
  • JPM expects headline inflation to ease to 4.65% y/y (0.45% 2w/2w) in the preliminary November CPI print, from 4.83%, and core inflation to be broadly stable at 3.77% y/y (0.23% 2w/2w). The drop in headline would be aided by the decreased weight in electricity tariffs this year relative to last. However, JPM thinks there are reasons to be cautious about the CPI outlook, with core disinflation likely done or almost done, in their view. While it could drift a few tenths lower, it should face resistance ahead, and likely start moving up again early next year.
  • Scotiabank anticipates a print of 0.52% compared to H2 October, as a result of lower prices driven by the Mexican Black Friday. For core inflation, they forecast a bi-weekly increase of 0.24%. Scotia believes that while the lower dynamism in consumption could contribute to a decrease in inflation, this could be offset by the depreciation of the exchange rate.
  • BBVA forecasts headline inflation to be almost unchanged at 4.75% y/y and core inflation to fall to 3.72% y/y. They have raised their end-year CPI forecast to 4.6% y/y, from 4.5%, and pared their core forecast to 3.7% y/y, from 3.8%. Given the inflation backdrop and underwhelming growth, BBVA expects Banxico to make another cut to the monetary policy rate in December.
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  • JPM expects headline inflation to ease to 4.65% y/y (0.45% 2w/2w) in the preliminary November CPI print, from 4.83%, and core inflation to be broadly stable at 3.77% y/y (0.23% 2w/2w). The drop in headline would be aided by the decreased weight in electricity tariffs this year relative to last. However, JPM thinks there are reasons to be cautious about the CPI outlook, with core disinflation likely done or almost done, in their view. While it could drift a few tenths lower, it should face resistance ahead, and likely start moving up again early next year.
  • Scotiabank anticipates a print of 0.52% compared to H2 October, as a result of lower prices driven by the Mexican Black Friday. For core inflation, they forecast a bi-weekly increase of 0.24%. Scotia believes that while the lower dynamism in consumption could contribute to a decrease in inflation, this could be offset by the depreciation of the exchange rate.
  • BBVA forecasts headline inflation to be almost unchanged at 4.75% y/y and core inflation to fall to 3.72% y/y. They have raised their end-year CPI forecast to 4.6% y/y, from 4.5%, and pared their core forecast to 3.7% y/y, from 3.8%. Given the inflation backdrop and underwhelming growth, BBVA expects Banxico to make another cut to the monetary policy rate in December.