WILLIAMS: 'WAY ABOVE' AMPLE LEVEL OF RESERVES

MNI BRIEF: Goolsbee Downplays Fed Disagreement, Hotter CPI

MNI BRIEF: US Sept CPI Hotter Than Forecast; Claims Higher Too

MNI China Daily Summary: Thursday, October 10

MNI: PBOC Net Drains CNY142 Bln via OMO Thursday

EZ/UK Bond Supply Calendar: BTP Auction on Friday

US EIA:NAT GAS STORAGE +82 BCF TO 3,629 BCF OCT 04 WK

MNI: US JOBLESS CLAIMS +33K TO 258K IN OCT 05 WK

CANADA: Politics Week: Parliament Opens With Early Election Threats

AUSTRALIA: Albanese Lines Up Budget for May Election

AUSTRALIA: Albanese Lines Up Budget for May Election

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

MEXICO: Itaú Says Banxico Minutes Signal Continuous Cuts

MEXICO
EM BulletMexicoBulletGlobalEmerging Market NewsRegion
  • Itaú says the Banxico minutes are consistent with their view of the central bank implementing continuous policy rate cuts ahead. Their base scenario is for Banxico to cut the policy rate by 25bp in each of the remaining meetings of the year, reaching 10.0% at year-end. The continuity of deputy governor Heath’s dissident vote should depend on the persistence of core services inflation.
  • Aside from Heath, Itaú notes that the majority of the board appears ready to continue cutting, as two members expressed willingness to discuss larger cuts. One member stated that the evolution of the inflationary and activity outlooks would allow for further rate cuts, with the level of core inflation allowing for an assessment of the size. Another member argued for a more cautious approach due to various risks and still elevated services inflation.
  • Itaú notes that a third member mentioned that the inflation outlook was consistent with cuts, as fundamentals still allowed for inflation to converge to target, while a fourth member explicitly mentioned that the inflationary outlook allowed for continuous adjustments, even for a discussion on the size of rate cuts.
183 words

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.
  • Itaú says the Banxico minutes are consistent with their view of the central bank implementing continuous policy rate cuts ahead. Their base scenario is for Banxico to cut the policy rate by 25bp in each of the remaining meetings of the year, reaching 10.0% at year-end. The continuity of deputy governor Heath’s dissident vote should depend on the persistence of core services inflation.
  • Aside from Heath, Itaú notes that the majority of the board appears ready to continue cutting, as two members expressed willingness to discuss larger cuts. One member stated that the evolution of the inflationary and activity outlooks would allow for further rate cuts, with the level of core inflation allowing for an assessment of the size. Another member argued for a more cautious approach due to various risks and still elevated services inflation.
  • Itaú notes that a third member mentioned that the inflation outlook was consistent with cuts, as fundamentals still allowed for inflation to converge to target, while a fourth member explicitly mentioned that the inflationary outlook allowed for continuous adjustments, even for a discussion on the size of rate cuts.