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TD Securities Expecting Less 2022 Tightening Than Current Market Pricing

MEXICO
  • TD expect Banxico to hike for both domestic inflation reasons and as a response to the July Fed hike. TD and the consensus expect the overnight rate higher by 75bps to 8.50%.
  • TD believe the end of the cycle is near, however, with a terminal rate possibly around 9-9.50%. The market is cumulatively priced for +235bps by Dec (60bps higher than TD) which they say suggests receiving front-end rates.

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