Yesterday’s Mexican inflation figures supplied little aid: the seasonally adjusted core price remained roughly per the earlier two months, Commerzbank’s FX analyst Michael Pfister notes.
Sticky inflation to delay Banxico cuts
“That is unlikely to have allayed considerations on the Mexican central financial institution a few renewed rise in inflation. In its newest determination, Banxico indicated that it’s prone to sluggish the tempo of rate of interest cuts within the close to future.”
“Though we’ll obtain extra knowledge earlier than the following assembly in early August, together with the preliminary GDP estimate for the second quarter, the most recent figures are prone to be ample to justify a slowdown. Within the brief time period, hypothesis about extra cautious rate of interest cuts might help the peso.”
“Within the medium time period, nonetheless – i.e. in direction of the top of the 12 months – we nonetheless count on extra rate of interest cuts than the market is at present anticipating.”
