MXN: Focus on Banxico minutes - TDS
|Analysts at TDS feel that the minutes from the November Banxico meeting will be rather interesting as the very important shift in the Banxico communication that re-elevated the importance of the U.S. – Mexico policy rate differential to prime importance above other factors in the outlook portion of the statement (up from 3rd to 1st).
Key Quotes
“This came after a significant re-rating of the Fed expectations, and a deterioration in NAFTA negotiations. The addition of a further risk to the inflation outlook in wage pressures also enhanced the hawkishness of the statement. While this came after a period in which MXN had sustained an approximate 8% depreciation on the back of aforementioned factors, we believe that the shift in the Banxico emphasis suggests that they are now watching the Fed differential once again.”
“We changed our call to a 25bp December hike from Banxico (from on hold), however we acknowledge that if financial markets, and thus the peso, perform extremely well before then, there is risk that Banxico elects to keep the powder dry.”
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.