MNI: PBOC Net Drains CNY2 Bln Via OMO Tues; Rates Unchanged

MNI: PBOC Sets Yuan Parity Higher At 7.1135 Tues; -1.61% Y/Y

CHINA PBOC INJECTS CNY2 BILLION VIA 7-DAY REVERSE REPOS TUES

CHINA SETS YUAN CENTRAL PARITY AT 7.1135 TUES VS 7.1106

MNI BRIEF: HNB Flash Analysis Sees May CPI, Core At 4.0%

MNI BRIEF: Mexico Inflation 4.69% In May, Below Consensus

First 10-days Export Growth Eases, April Current A/C Deficit Due To Dividend Outflows

US Treasury Auction Calendar

IP Weak In April, With Surveys Suggesting Little Respite Ahead

RPT-MNI: Canada Sticks To Fiscal Anchors, Spends Chunk Of Windfall

MNI BRIEF: Poilievre Calls QE 'Scam' And Would Limit BOC Remit

MNI: Growth Drag From Net Zero Carbon Goal Can Be Offset-OECD

© 1982-2024 MNI. All rights reserved.
Terms | Privacy
Log Out
Free Trial

UBS See Risk of 75bps Hike at Thursday's Rate Decision

BANXICO
  • The question facing Banxico this week is whether they should accelerate the pace of tightening, with a 75bps move a plausible option. Inflation continues to surprise to the upside, with the war in Ukraine driving energy and grain prices - increasing upside risks to inflation which are already seeping through to expectations.
  • The Bank’s most recent policy decisions suggest that a 75bp move cannot be ruled out. On average, core inflation is some 75 bps higher than it was in the prior meeting, and yet Banxico stuck to a 50bp hike, but at least some members considered the possibility of a 75bp hike.
  • UBS now calculate inflation some 120bps higher on average than Banxico had it in the MPC meeting. As such, it is likely, in our view, that they revise their core numbers up on average by 75-100bps. In this scenario, delivering a 75bp hike becomes a possibility, and would be consistent with their prior thinking and actions.
  • Nonetheless, we still think the majority will opt for maintaining the pace of hikes at 50bps. There is a lot of volatility around commodity prices and basing the decision to hike by a larger 75bps off of that may prove costly in the event of a major downward correction. Also, the Fed has just signaled a prolonged tightening cycle, and its willingness to contemplate larger 50bp hikes in coming meetings.
MNI London Bureau | +44 203-865-3809 | edward.hardy@marketnews.com
EM BulletHomepagemarkets-real-timeBulletEmerging Market News
MNI London Bureau | +44 203-865-3809 | edward.hardy@marketnews.com
EM BulletHomepagemarkets-real-timeBulletEmerging Market News

To read the full story

Close

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.