MEXICO: Banxico to Slow Easing Pace, July CPI Seen Steady at 0.28% M/M
Aug-07 10:20
- July inflation data is due 13:00BST/06:00 local time, with analysts expecting the headline component to stay at 0.28% M/M and core CPI to slow to 0.30% M/M from 0.39% prior. On a year-on-year basis, headline CPI is expected to edge lower to +3.53% Y/Y (Prior: +4.32%) while core is seen at +4.23% Y/Y (Prior: +4.24%). Base effects on food and energy prices are expected to drive much of the decline in the headline figure.
- Since the June Banxico meeting, the economy has been characterised by the familiar mix of weak activity but elevated inflation pressures, particularly in the core component. Although headline CPI inflation ticked down to 4.32% y/y in June, stronger-than-expected core CPI inflation data support the case for Banxico to slow the easing pace ahead – and after four consecutive 50bp rate cuts, Banxico’s governing board is widely expected deliver a 25bp cut in the overnight rate to 7.75%.
- The rate decision will be announced at 20:00BST/13:00BST. Our full preview, with a summary of sell-side views, can be found here.
- Meanwhile, in a post on X, President Claudia Sheinbaum said she met with Blackstone’s Stephen A. Schwarzman, and added that “the firm will expand its investments in Mexico”. Sheinbaum delivers here usual daily press briefing at 14:30BST/07:30 local time.
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