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MEXICO: JP Morgan Remain MW Mexico Rates in GBI-EM Model Portfolio

MEXICO
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  • According to JP Morgan, volatile local markets in Mexico will likely keep the central bank’s forward guidance cautious as we transition into a new administration in Mexico and towards the US election in November.
  • For now, the market is pricing an uninterrupted 25bps cutting cycle for the next year, with some chance of an acceleration in early 2025 (-225bps in total in the next 12 months).
  • JPM think that inflation trend (4.83% oya in August) will allow Banxico to continue cutting rates, but it will be difficult for the board to entertain bigger cuts than what the curve has priced in, particularly ahead of big risk events such as the election in the US and the release of Mexico’s fiscal plan for 2025, both happening in November.
  • Accordingly, JPM are staying MW Mexico rates in the GBI-EM model portfolio.
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  • According to JP Morgan, volatile local markets in Mexico will likely keep the central bank’s forward guidance cautious as we transition into a new administration in Mexico and towards the US election in November.
  • For now, the market is pricing an uninterrupted 25bps cutting cycle for the next year, with some chance of an acceleration in early 2025 (-225bps in total in the next 12 months).
  • JPM think that inflation trend (4.83% oya in August) will allow Banxico to continue cutting rates, but it will be difficult for the board to entertain bigger cuts than what the curve has priced in, particularly ahead of big risk events such as the election in the US and the release of Mexico’s fiscal plan for 2025, both happening in November.
  • Accordingly, JPM are staying MW Mexico rates in the GBI-EM model portfolio.