MNI BRIEF: Fed's Bowman Expects Continued Economic Strength

MNI: FED'S BOWMAN: WATCHING LABOR MARKET CLOSELY

MNI BRIEF: Real Interest Rates Have Risen - ECB's Escriva

MNI China Daily Summary: Friday, September 27

MNI: PBOC Net Drains CNY238.9 Bln via OMO Friday; Rate Cut

MNI: PBOC Sets Yuan Parity Lower At 7.0101 Fri; +4.14% Y/Y

MNI: UNIV OF MICHIGAN CONSUMER SENTIMENT FINAL SEP INDEX 70.1

EZ/UK Bond Supply Calendar: BoE APF on Monday

MNI: US AUG PERSONAL INCOME +0.2%; NOM PCE +0.2%

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: Scotiabank Says 25bp Cut Appropriate Given Domestic Uncertainties

MEXICO
EM BulletMexicoBulletGlobalEmerging Market NewsRegion
  • Scotiabank believes that Banxico not following the Fed with a larger 50bp cut yesterday was appropriate, as Banxico began its cutting cycle earlier, and core inflation in Mexico remains stickier and more persistent than in the US. Also, Mexico faces additional domestic factors of uncertainty, so the 25bp cut looks more appropriate with the current outlook.
  • As Scotiabank expected, one of the reasons the Board of Governors' gave for cutting is the slowdown in economic activity. Meanwhile, they believe that the forward guidance in the statement signalled additional cuts in the remainder of the year, in line with analysts’ and market expectations. However, Scotiabank believes that the outlook continues to be marked by an environment of uncertainty, so that future episodes of volatility could impact the monetary policy path.
  • They note that the implied curve rose to 10.09% at its 3-month node, in line with analysts’ consensus of a year-end rate at 10.0% for 2024 and 8.0% for 2025.
157 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.
  • Scotiabank believes that Banxico not following the Fed with a larger 50bp cut yesterday was appropriate, as Banxico began its cutting cycle earlier, and core inflation in Mexico remains stickier and more persistent than in the US. Also, Mexico faces additional domestic factors of uncertainty, so the 25bp cut looks more appropriate with the current outlook.
  • As Scotiabank expected, one of the reasons the Board of Governors' gave for cutting is the slowdown in economic activity. Meanwhile, they believe that the forward guidance in the statement signalled additional cuts in the remainder of the year, in line with analysts’ and market expectations. However, Scotiabank believes that the outlook continues to be marked by an environment of uncertainty, so that future episodes of volatility could impact the monetary policy path.
  • They note that the implied curve rose to 10.09% at its 3-month node, in line with analysts’ consensus of a year-end rate at 10.0% for 2024 and 8.0% for 2025.