MXN - Banxico

MXN - Banxico

15-SEPT-2023


BANXICO ANNOUNCEMENT (WED): Data showed Mexican CPI rose 0.6% M/M in August, a little above the expected 0.5%, but the annual rate cooled to 4.6% Y/Y from 4.8% in July. Services inflation, however, which Banxico officials have been closely watching, was unchanged at 5.0% Y/Y, a function of hot wage growth, which is currently running at a rate of above 10% Y/Y, keeping many of the central bank's officials in a hawkish mood. "Disinflation in Mexico remains broad-based, which will allow Banxico to cut interest rates in Q4, in both November and December," Pantheon Macroeconomics writes, but adds that "policymakers' still-hawkish tone, though, has increased the likelihood of the easing cycle starting in December or early 2024."