Previewing the Central Bank of Mexico’s (Banxico) monetary policy meeting this week, “we expect Banxico to cut the policy rate 25bp to 7.25% on Thursday, December 19th,” said Rabobank analysts.
Key quotes
“Unlike the previous meeting, analysts seem united in calling for a 25bp move (no calls for 50bp) with all those surveyed by Bloomberg unanimous in their forecasts. Of the 12 analysts surveyed by Bloomberg, the call for a 25bp cut is unanimous.
We expect growth in 2019 was non-existent and we only expect growth of 0.3% y/y in 2020.”
“Banxico is likely to continue cutting in 2020 and we expect some 50bp moves taking the policy rate down to 4.50% by year-end. This is in contrast to the 6% mode of analyst expectations on Bloomberg, the 6.50% consensus from Banxico’s survey, and the 6.4% implied by the front-end of the rates curve. We expect USD/MXN to primarily trade a 19.20 to 19.60 range in the next 1-3 months.”
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