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.
Executive Summary:
- Consensus looks for an unchanged Banxico decision in May
- Slowing headline, and core inflation, will aide some policymakers in believing the tightening cycle should conclude
- However, the stickiness of wages, the jobs market and growth will prevent the bank from calling an end to further rate rises ahead
Full preview including summary of sell-side views here:
MNI Banxico Preview - May 2023.pdf
Market consensus looks for an unchanged Banxico decision in May, although there remain a small minority looking for the tightening path to continue this month. Slowing headline, and core inflation, will aide some policymakers in believing the tightening cycle should conclude this month. However, the stickiness of wages, the jobs market and growth will prevent the bank from calling an end to further rate rises ahead. This leaves a prolonged pause, with the optionality of further tightening, the most likely scenario for Banxico.
Voting among the board will likely be split, with the majority opting for no change, with 1 to 2 dissenters voting to continue the tightening pace. This should lead to a more moderated policy statement this month, acknowledging the impact of the tightening path so far, but stopping short of declaring that no further rate hikes could follow. As such, a phase of data dependence is the most likely path for policy going forward, re-coupling the path for the overnight rate with that of the Fed, which appear on track to conduct a pause of their own.
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.