Sacha Tihanyi, Deputy Head of Emerging Markets Strategy at TDS, sees a 25bp hike at the June meeting, and revise their call for the easing cycle to begin in December (with 25bps), rather than in October.
Key Quotes
“Near term MXN weakness and the impact on inflation and inflation expectations have led us to revise our inflation forecast trajectory higher in 2019, underpinning our more hawkish rates trajectory view.”
“However, the impact of high nominal and real rates is evident in core inflation measures, and is providing a restraint for the economy, nullifying the need for further substantial hikes.”