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MNI Banxico Preview - Nov 2022: Core CPI Pressures To Confirm 75BP Hike

All surveyed analysts expect Banxico to raise the overnight rate by 75bps to 10.00% at the November meeting.

Executive Summary

  • All surveyed analysts expect Banxico to raise the overnight rate by 75bps to 10.00% at the November meeting.
  • Continued upward pressure on core inflation and a willingness to match the Federal Reserve’s hawkish stance cement the need to maintain an aggressive pace of tightening at this juncture.
  • However, given the most recent Banxico rhetoric, the statement will be closely scrutinised for any dovish signals that could pave the way for a deceleration in the hiking pace at coming meetings.
  • Furthermore, a dissenting vote for a smaller hike at this meeting should not be ruled out.

Click to view full preview: MNI Banxico Preview - November 2022.pdf

Inflation Outlook Remains A Challenge For Central Bank Board

The latest bi-weekly print for the headline annual rate of inflation came in at 8.53%, slightly below both the prior reading of 8.64% and a surveyed median estimate of 8.62%. However, keeping pressure on the Banxico board, core CPI rose to 8.39% from 8.29%, extending the continuous uptrend for the metric. Processed foods remain as the main source of concern, although services also gathered momentum in the period.

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Executive Summary

  • All surveyed analysts expect Banxico to raise the overnight rate by 75bps to 10.00% at the November meeting.
  • Continued upward pressure on core inflation and a willingness to match the Federal Reserve’s hawkish stance cement the need to maintain an aggressive pace of tightening at this juncture.
  • However, given the most recent Banxico rhetoric, the statement will be closely scrutinised for any dovish signals that could pave the way for a deceleration in the hiking pace at coming meetings.
  • Furthermore, a dissenting vote for a smaller hike at this meeting should not be ruled out.

Click to view full preview: MNI Banxico Preview - November 2022.pdf

Inflation Outlook Remains A Challenge For Central Bank Board

The latest bi-weekly print for the headline annual rate of inflation came in at 8.53%, slightly below both the prior reading of 8.64% and a surveyed median estimate of 8.62%. However, keeping pressure on the Banxico board, core CPI rose to 8.39% from 8.29%, extending the continuous uptrend for the metric. Processed foods remain as the main source of concern, although services also gathered momentum in the period.

Keep reading...Show less