MNI BRIEF: Chinese Rail Passenger Numbers Break Record

MNI: PBOC Net Injects CNY37.3 Bln via OMO Wednesday

MNI: PBOC Sets Yuan Parity Lower At 7.1843 Weds; -1.22% Y/Y

MNI BRIEF: Brazil Not Even Close To Fiscal Dominance - David

CORRECTED-MNI BRIEF: Brazil Inflation Rises To 4.87% In Nov

MNI China Daily Summary: Tuesday, December 10

EZ/UK Bond Supply Calendar: 4.25% Jul-34 Gilt Due Wednesday

EZ/UK T-Bill Calendar: 12-Month BOT Auction on Wednesday

MNI: JAPAN NOV CORP GOODS PRICE INDEX +3.7% Y/Y; OCT REV +3.6%

MNI EXCLUSIVE: EU-Mercosur Deal Close, But Likely Short-Lived - Officials

AUSTRALIA: 2025 Election Outcome Looking More Uncertain According To Newspoll

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

MEXICO: JP Morgan Expects Banxico To Cut By 25bp This Week

MEXICO
EM BulletMexicoBulletGlobalEmerging Market NewsRegion
  • JP Morgan thinks the case for a Banxico rate cut is even stronger than in August. The Fed factor and the validation of the temporary nature of the non-core shocks will add to downbeat growth expectations for the following quarters and as the board seeks to gain momentum in order to bring the policy rate closer to a neutral stance next year, around 8%.
  • Although there are some concerns related to sticky inflation expectations and forthcoming wage adjustments, the board is aware that refraining from easing now could complicate its room for manoeuvring next year, when fiscal challenges, bilateral tensions, and the risk of further MXN weakness in the context of downgrade risks could result in a ‘monetary policy trap’: a higher terminal rate for longer.
  • The risk of a 50bp cut should not be ignored, and JPM thinks a dovish pro-50bp cut dissenter could be present as soon as this week, precisely in the context of a broader window swiftly opened by the Fed this month. JPM currently expects a pause in November, but as things stand right now, this is looking not very compelling even if policy and political risks are expected to re-emerge soon.
195 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.
  • JP Morgan thinks the case for a Banxico rate cut is even stronger than in August. The Fed factor and the validation of the temporary nature of the non-core shocks will add to downbeat growth expectations for the following quarters and as the board seeks to gain momentum in order to bring the policy rate closer to a neutral stance next year, around 8%.
  • Although there are some concerns related to sticky inflation expectations and forthcoming wage adjustments, the board is aware that refraining from easing now could complicate its room for manoeuvring next year, when fiscal challenges, bilateral tensions, and the risk of further MXN weakness in the context of downgrade risks could result in a ‘monetary policy trap’: a higher terminal rate for longer.
  • The risk of a 50bp cut should not be ignored, and JPM thinks a dovish pro-50bp cut dissenter could be present as soon as this week, precisely in the context of a broader window swiftly opened by the Fed this month. JPM currently expects a pause in November, but as things stand right now, this is looking not very compelling even if policy and political risks are expected to re-emerge soon.