19 Feb 2015
Banxico likely to hike rates after the Fed – Scotiabank
FXStreet (Edinburgh) - Eduardo Suarez, Senior Currency Strategist at Scotiabank, believes the Banxico should hike rates right after the Fed.
Key Quotes
“A big debate at the moment, is whether Banxico will move before the Fed, as was suggested by a couple of the board’s members in the last MPC minutes”.
“On this point, our sense is that the argument with which another board member countered is strong. He suggested that given the difficulty of predicting when the Fed will hike, it is a very complicated strategy to execute, and we believe it’s likely easier to signal plans to the Mexico’s policy to the Fed’s, and move right after it, than to try to predict what / when the Fed will move”.
“The tough thing about the calendar for the two institutions, is that depending on what meeting we look at, Banxico’s meeting can be right after the Fed (April), or a month apart”.
“For either the June or September Fed meetings (both of which have press conferences), the following Banxico meeting is a month away, which highlights the importance of clearly linking its own policy to that of Mexico’s northern neighbour”.
Key Quotes
“A big debate at the moment, is whether Banxico will move before the Fed, as was suggested by a couple of the board’s members in the last MPC minutes”.
“On this point, our sense is that the argument with which another board member countered is strong. He suggested that given the difficulty of predicting when the Fed will hike, it is a very complicated strategy to execute, and we believe it’s likely easier to signal plans to the Mexico’s policy to the Fed’s, and move right after it, than to try to predict what / when the Fed will move”.
“The tough thing about the calendar for the two institutions, is that depending on what meeting we look at, Banxico’s meeting can be right after the Fed (April), or a month apart”.
“For either the June or September Fed meetings (both of which have press conferences), the following Banxico meeting is a month away, which highlights the importance of clearly linking its own policy to that of Mexico’s northern neighbour”.