Banxico Governor Carstens: Too early to talk rate cuts next year

Headlines crossed the wires earlier on the day from the Banco de Mexico (Mexican Central Bank) Governor Agustin Carstens, during his interview with Reuters.

Main Headlines:

Risk for peso include oil prices, relationship with US and surprises from US monetary policy

Mexico's current monetary policy is "much stronger" anchor on exchange rate

Mexico now better prepared for different outcomes that could result from NAFTA negotiation

NAFTA process has been smoother than expected, handled in professional way by both parties

Tight fiscal and monetary policies in place will help Mexico weather volatility related to Mexican 2018 elections and NAFTA renegotiation

Results of economic reforms should put Mexico in relatively favorable situation next year

Mexico's monetary policy position should not be a major factor in slowing the economy this year

Mexico's monetary policy is on higher end of neutrality towards restrictive

The majority of board considers that inflation will "for sure" peak in the second half of the year

His personal view is we are not very far away from inflation peak

So far we have been successful in avoiding second order effects on prices

We have not seen much pressure on inflation from wage increases

Tightness in labor market is something we will have to be very watchful of in coming months