27 Apr 2015
Expect Banxico to remain on hold – TDS
FXStreet (Edinburgh) - According to Paul Fage, Senior Emerging Markets Strategist at TD Securities, the Mexican central bank could refrain from easing further, leaving rates at 3.0%.
Key Quotes
“At Thursday’s meeting of the Board of Governors of Banxico we, in line with the unanimous consensus, expect the Overnight Rate to be kept on hold at 3.0%”.
“With March headline CPI inflation running at 3.14% Y/Y, close to the middle of the 3.0% +/-1.0% target range, and core at 2.45%, there is no reason for Banxico to move rates”.
“Looking forward, we think that the next move in Mexican rates will be up and that will follow immediately in response to the Fed hiking”.
“The short-end of the TIIE curve is implying no move at today’s meeting, and a year-end Overnight Rate 65bp higher than now”.
“We currently expect the Fed to hike by 50bp by the end of this year starting in September. So we do not think the 65bp the TIIE curve is implying by year-end is that unreasonable”.
Key Quotes
“At Thursday’s meeting of the Board of Governors of Banxico we, in line with the unanimous consensus, expect the Overnight Rate to be kept on hold at 3.0%”.
“With March headline CPI inflation running at 3.14% Y/Y, close to the middle of the 3.0% +/-1.0% target range, and core at 2.45%, there is no reason for Banxico to move rates”.
“Looking forward, we think that the next move in Mexican rates will be up and that will follow immediately in response to the Fed hiking”.
“The short-end of the TIIE curve is implying no move at today’s meeting, and a year-end Overnight Rate 65bp higher than now”.
“We currently expect the Fed to hike by 50bp by the end of this year starting in September. So we do not think the 65bp the TIIE curve is implying by year-end is that unreasonable”.