Search ForexCrunch

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.”