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MEXICO: Risks May Be Skewed Towards Another Banxico Hold

MEXICO
  • Mexico (Thursday): Risks appear to be balanced over whether Banxico could deliver a 25bp rate cut or continue to hold the overnight rate at 11.00%. The minutes of the May meeting suggested a June adjustment may be considered and is made more likely considering the downside surprise for Core CPI in May. However, post-election market turbulence, the sharp depreciation of the peso and a cautious Fed might be skewing risks towards another hold. 
  • Mid-month inflation data is due Monday and could provide a crucial ingredient for the committee.

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