Mexico: Banxico to continue a 25bps per meeting easing path? – TDS

Sandeep Kanihama FXStreet Contributor

In view of analysts at TD Securities, Banxico gives us little reason to believe that they will not continue a 25bp per meeting easing path, justified by weak economic conditions and a substantial output gap.

Key Quotes

“We continue to believe that an increment to a 50bp pace of easing will remain off the table for now, despite the presence once again of two dissents for a greater magnitude of easing.”

“We also note a subtle change in the final paragraph of Banxico's statement, that de-tethers the importance of Banxico's relative policy rate to the Fed.”

“Ultimately it suggests broader considerations of Mexico's relative policy rate, opening up greater flexibility to continue cutting, should the Fed not ease further.”

Author

Sandeep Kanihama

FXStreet Contributor

Sandeep Kanihama is an FX Editor and Analyst with FXstreet having principally focus area on Asia and European markets with commodity, currency and equities coverage. He is stationed in the Indian capital city of Delhi.

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