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.
MNI Banxico Preview - November 2023
Executive Summary
- All analysts are expecting Banxico to keep the overnight rate unchanged at 11.25%.
- This is in line with the current guidance from the committee that it “will be necessary to maintain the reference rate at its current level for an extended period” in order to achieve a convergence of inflation to the 3% target.
- The persistence of above-target core inflation, alongside the stronger-than-expected growth outlook, should reinforce the cautious tone of the committee, while reaffirming the commitment to its data dependent stance.
Click to view the full preview:
MNI Banxico Preview - November 2023.pdf
Deputy Governor Heath Reiterates Easing Not Yet On The Table
Between meetings, Banxico Deputy Governor Jonathan Heath has been vocal that the central bank has no intention of altering policy for the remainder of 2023. “We say we are not going to move for an extended period of time. We’re basically saying we are not going to move it in November or December,” Heath said.
Openly discussing the topic of rate cuts, Heath provided a very flexible timeline and reiterated the board will retain its “very” data dependent stance as the topic of when to begin policy easing approaches. “We’re open. It could be as of February, but it could be March, it could be May, June”, the deputy governor stated. As a reminder, Heath previously took to social media to reiterate his hawkish views, stating that Mexico’s recent developments for core inflation data were “good news” but it still has a “long way to go.”
Growth data has remained particularly resilient with the preliminary Q3 read confirming a growth rate of 3.3% Y/y, above the 3.2% surveyed median estimate. Following the data release, the latest central bank survey of economists upgraded the 2023 & 2024 year-end growth forecasts to 3.25% and 2.02% respectively. Furthermore, analysts continue to highlight that domestic demand has been remarkably resilient amid a complex external environment and that the labour market remains healthy. Indeed, Heath commented that resilient consumption, low unemployment and strong private investment are among the factors pointing to a “very dynamic economy, which obviously is working against us trying to fight inflationary pressures.”
Mid-October Annual Core Inflation Registers Above Surveyed Estimate
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.