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25 Feb 2015
Banxico warming up for a rate hike? – Scotiabank
FXStreet (Edinburgh) - Strategist at Scotiabank, believes the Banxico could hike rates this year, right after the Fed.
Key Quotes
“Governor Carstens said he believes that inflation could end 2015 below target, but that take did not seem to dent his signal that the central bank is reading to hike”.
“Carstens said given how low interest rates at the moment, a less simulative policy setting should not provide too much of a headwind to growth”.
“Banxico seems to be strongly tied to the Fed for policy direction, while our G10 team sees the Fed in “data dependence mode”, which means continued strong employment numbers, and a stabilization in inflation are the requisites for lift‐off”.
“Our sense is that the Mexican economy is starting to see domestic demand picking up, while the export side continues to post a robust performance”.
“In addition, Banxico looks set to be the next “Spanish speaking” LATAM CB to start hiking rates (the BCB will likely take that award first)”.
Key Quotes
“Governor Carstens said he believes that inflation could end 2015 below target, but that take did not seem to dent his signal that the central bank is reading to hike”.
“Carstens said given how low interest rates at the moment, a less simulative policy setting should not provide too much of a headwind to growth”.
“Banxico seems to be strongly tied to the Fed for policy direction, while our G10 team sees the Fed in “data dependence mode”, which means continued strong employment numbers, and a stabilization in inflation are the requisites for lift‐off”.
“Our sense is that the Mexican economy is starting to see domestic demand picking up, while the export side continues to post a robust performance”.
“In addition, Banxico looks set to be the next “Spanish speaking” LATAM CB to start hiking rates (the BCB will likely take that award first)”.