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 Chile Central Bank Preview - July 2023
Executive Summary
- The BCCh is expected to initiate the easing cycle and the consensus forecast is for a 75bp rate cut, taking the policy rate to 10.50%. This follows prior guidance from the central bank whereby if the most recent disinflation trend persists, “the bank will start a rate cut cycle in the short term”.
- Surveyed forecasts regarding the magnitude of the first rate reduction range from 50-100bps. Some analysts have focused on the minority votes at the June meeting, whereas others have cited the most recent economic data as bolstering the case for a larger cut to the monetary policy rate.
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MNI Chile Central Bank Preview - July 2023.pdf
Inflation Surprises To Downside, Economic Activity Falls
June CPI data provided pleasing news for the central bank committee, with another softer-than-expected read of 7.6%, down from 8.7% in May. Furthermore, there was also an improvement in the CPI ex volatiles measure, which dipped to 9.1% Y/y from 9.9%. Optimism has also filtered through to the central bank surveys of expectations. The latest economist survey is now forecasting 2023 year-end inflation at 4.2%, down from 4.7% and both economist and traders survey are expecting a 75bp monetary policy rate cut at the July meeting.
Bolstering the case for this consensus view was the underwhelming economic activity (IMACEC) data, released in early June. Despite the May IMACEC release coming in moderately above-expectations, the -0.5% print confirmed the economy had returned to monthly contractive territory. Furthermore, lower revisions prompted the annual data to come in below expectations at a reading of -2.0% Y/y.
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.