MXN: Inflation figures bring no relief – Commerzbank
|Yesterday's Mexican inflation figures offered little relief: the seasonally adjusted core rate remained roughly consistent with the previous two months, Commerzbank's FX analyst Michael Pfister notes.
Sticky inflation to delay Banxico cuts
"This is unlikely to have allayed concerns at the Mexican central bank about a renewed rise in inflation. In its latest decision, Banxico indicated that it is likely to slow the pace of interest rate cuts in the near future."
"Although we will receive more data before the next meeting in early August, including the initial GDP estimate for the second quarter, the latest figures are likely to be sufficient to justify a slowdown. In the short term, speculation about more cautious interest rate cuts could support the peso."
"In the medium term, however - i.e. towards the end of the year - we still expect more interest rate cuts than the market is currently anticipating."
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