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27 Mar 2015
Banxico keeps looking to the Fed – TDS
FXStreet (Edinburgh) - In light of yesterday’s ‘on-hold’ stance by the Mexican central bank (Banxico), Strategist at TD Securities Blue Macellari reviewed the decision and the statement.
Key Quotes
“As we, and the market, expected, Banxico kept the overnight policy rate unchanged at 3.0% today. In the post-meeting statement, the Board observed that while the balance of risks to inflation remain unchanged since the last meeting, that the balance of risks to growth has deteriorated since the January meeting”.
“In terms of the peso depreciation, the Board recognized that thus far depreciation has not generated second-order effects. However, they did acknowledge that further depreciation could pose an upside risk to inflation”.
“In total, the statement was fairly neutral, but moreover, the statement reinforced our view that the timing of the Fed’s lift-off is the key factor for Banxico”.
“We think it is unlikely that Banxico will look to raise rates ahead of the Fed. As such, we continue to expect that Banxico will leave rates unchanged at 3.0% until the third quarter”.
Key Quotes
“As we, and the market, expected, Banxico kept the overnight policy rate unchanged at 3.0% today. In the post-meeting statement, the Board observed that while the balance of risks to inflation remain unchanged since the last meeting, that the balance of risks to growth has deteriorated since the January meeting”.
“In terms of the peso depreciation, the Board recognized that thus far depreciation has not generated second-order effects. However, they did acknowledge that further depreciation could pose an upside risk to inflation”.
“In total, the statement was fairly neutral, but moreover, the statement reinforced our view that the timing of the Fed’s lift-off is the key factor for Banxico”.
“We think it is unlikely that Banxico will look to raise rates ahead of the Fed. As such, we continue to expect that Banxico will leave rates unchanged at 3.0% until the third quarter”.