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:
- Banxico seen hiking rates by 75bps to reinstate policy differential with the Fed
- Evidence building of that bank could be nearing slower phase of tightening
- Focus will be on language, after August’s statement opened the door to smaller rate hike
Despite elements of a dovish turn in August’s policy statement from the bank, still-high CPI and tightening conditions among trade partners should give the board ample justification for another 75bps step at this meeting. Markets will be on watch for any further tweaks in language after August’s decision to remove the phrase “same forceful measures” from the statement. Instead, the MPC will likely retain the phrasing around future hikes being “based on the prevailing conditions” – a tweak that was read as dovish at the time.
Nonetheless, the over-arching tone of the statement remained hawkish, and the August CPI turn-out continues to support the balance of risks for inflation being “biased significantly to the upside”. Both core and headline inflation tipped just ahead of market expectations, at 0.70% M/M and 0.80% for the core reading, suggesting plentiful pipeline inflation to keep the onus for rates pointed higher into year-end.
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.