Mexico

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September 05, 2024

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Mexico CPI Preview: Stabilization on August
Freemium Article

September 5, 2024 4:39 PM UTC

Mexico’s August CPI is expected to remain flat at 0%, with year-on-year inflation dropping to 5.0% from 5.5% in July, driven by a contraction in non-core CPI. Core CPI is projected to rise by 0.2%, bringing its year-on-year figure to 3.9%. This trend may give Banxico more confidence to resume inte

August 29, 2024

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Mexico: Inflation Report Shows Confidence in Cuts
Paying Article

August 29, 2024 2:08 PM UTC

Banxico's latest report reveals a weaker growth outlook, with a 2024 forecast cut to 1.4% and further weakening expected in 2025. Despite rising non-core CPI, inflation remains controlled. Banxico is likely to continue rate cuts, aiming for a year-end policy rate of 10.25%, amid moderate inflation c

August 23, 2024

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Banxico Minutes: Cuts on the Table, Divided Board
Paying Article

August 23, 2024 1:02 PM UTC

Banxico has resumed its rate-cutting cycle, reducing the policy rate from 11% to 10.75%, with a split board decision. Most members noted weakening domestic activity and external volatility impacting the exchange rate. While some view the rise in non-core inflation as transitory, others see it, along

August 21, 2024

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Mexico: FDI Increases but No Sign of Nearshoring
Paying Article

August 21, 2024 2:50 PM UTC

Mexico's FDI reached USD 31 billion in the first half of 2024, a 7% increase from 2023. However, this figure may be inflated by not accounting for USD inflation, potentially reducing real growth. While nearshoring discussions continue, current FDI largely reflects reinvestment by existing foreign fi

August 16, 2024

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Mexico: Moving Towards Deficit as Expected
Paying Article

August 16, 2024 8:10 PM UTC

Mexico's fiscal situation is becoming challenging, with a primary deficit emerging due to increased support for PEMEX and overestimated growth projections. The Debt/GDP ratio is expected to rise to around 50.8% by 2024, possibly stabilizing around 49-54% depending on fiscal consolidation efforts. Wh

August 14, 2024

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EM Markets Divergence with China Harder Landing Concerns
Paying Article

August 14, 2024 3:35 PM UTC

Global market turbulence has had a spillover impact into EM, but also some EM assets have benefitted from rotation away from the U.S.  What are the prospects in the coming months?
We see scope for a 2nd wave of U.S. equity and Japanese Yen (JPY) correction, which are a mixed influence for EM assets

August 09, 2024

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Banxico Review: 25bps Cut Amid the Risk
Freemium Article

August 9, 2024 1:08 PM UTC

Banxico narrowly voted (3-2) to cut the policy rate by 25bps, despite rising headline inflation and peso depreciation. Core inflation is declining, standing at 4% year-over-year, with expectations of further decreases. Inflation is projected to hit the 3% target by Q4 2025. Future rate decisions wil

August 08, 2024

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Mexico CPI Review: Food Prices Lead the 1% Rise
Freemium Article

August 8, 2024 1:56 PM UTC

Mexico's CPI rose by 1.0% in July, pushing the year-over-year rate to 5.6%, the highest since November 2021. The increase was driven by a 1.9% rise in food and beverages due to drought and exchange rate impacts. Non-core inflation surged by 3.3%, widening the gap with core inflation. Given these ris

August 02, 2024

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Banxico Preview: Inclined to Cut but There Are Risks
Paying Article

August 2, 2024 1:00 PM UTC

The Mexican Central Bank will meet on Aug. 8 to consider a 25 bps rate cut, though risks remain. At 11%, the rate is highly contractionary, impacting job creation and growth. The MXN’s volatility and 10% depreciation since June pose short-term inflation risks, complicating rate cuts. Adverse clima

July 30, 2024

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Mexico GDP Review: Slow Growth in Continues
Paying Article

July 30, 2024 4:22 PM UTC

Mexico's GDP grew by just 0.2% in Q2 2024, with Industry and Services up 0.3% but Agriculture down 1.7%. The economy shows signs of deceleration, especially in agriculture due to extreme climate conditions, despite rising wages. The detailed data is pending, but a slowdown in investment and consumpt

July 25, 2024

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Mexico: Mixed Signs for Banxico
Paying Article

July 25, 2024 1:52 PM UTC

The Mexican economy shows mixed signals for Banxico. Economic activity indicates a slowdown, with weaker industrial activity and decelerating formal employment. However, inflation is rising, particularly in non-core components like energy and agricultural goods, influenced by climate conditions. The

July 17, 2024

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Brazil and Mexico: Supply and Demand Factors Affecting Inflation
Freemium Article

July 17, 2024 6:52 PM UTC

We decomposed inflation in Brazil and Mexico using a Vector Autoregressive (VAR) Model, focusing on Imported Inflation, Demand, Supply, and Monetary Policy. Our analysis from 2003 to 2024 for Brazil and 2005 to 2024 for Mexico shows Brazil's inflation was primarily driven by supply and imported infl

July 12, 2024

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Banxico Minutes: More Slack Could Give Room for Rate Cuts
Paying Article

July 12, 2024 2:43 PM UTC

Banxico kept the policy rate unchanged at 11.0% but showed a slightly dovish tone, hinting at possible cuts in August. June's CPI figures revealed a widening gap between core and non-core inflation. Despite recent economic slowdowns and the MXN Peso's depreciation, Banxico expects economic slack to

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Latin America: Country Risk Ratings
Paying Article

July 12, 2024 10:05 AM UTC

We provide country risk reviews for select Latin America countries including Argentina, Brazil, Chile, Colombia and Mexico. 

July 09, 2024

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Mexico CPI Review: 0.38% Inflation in June
Paying Article

July 9, 2024 7:46 PM UTC

INEGI reports Mexico's CPI rose 0.38% in June, above expectations. Year-over-year CPI increased to 5.0%, with core CPI at 4.1% and non-core CPI at 7.7%. Non-agricultural goods drove the rise, raising concerns about inflation due to climate-related agricultural shocks. Food and beverages saw the high

July 02, 2024

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Webinar Recording June Outlook: Cyclical and Structural Forces
Paying Article

July 2, 2024 7:30 AM UTC

July 01, 2024

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EM After the Elections: Fiscal Focus and Inflation Questions
Paying Article

July 1, 2024 8:05 AM UTC

Enhancing fiscal credibility is key post-election in India and S Africa, but also for Brazil.  India, will do this in the 3 week of July, but S Africa needs to move from ANC/DA led coalition optimism to reality quickly. Brazil needs to stop the vicious circle of sentiment building up on fiscal slip

June 28, 2024

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Banxico Review: Continuing the Pause
Paying Article

June 28, 2024 1:59 PM UTC

The Mexico Central Bank (Banxico) kept the policy rate unchanged at 11.0%, despite one member advocating a 25 basis points cut. Banxico hinted at potential rate cuts in 2024 due to a slowing economy and inflation outlook. An August cut remains possible but seems premature. Market and Banxico inflati

June 26, 2024

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June Outlook: Cyclical and Structural Forces
Paying Article

June 26, 2024 7:58 AM UTC

The 15 chapters of our June Outlook have now been published.  See the headlines and weblinks enclosed for links to the articles on economic, policy and markets for the 23 countries that we cover

June 25, 2024

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Outlook Overview: Cyclical and Structural Forces
Paying Article

June 25, 2024 10:15 AM UTC

•    The global economy is showing signs of healing, as inflation comes back towards targets and growth recovers momentum in some economies. Nevertheless, the cyclical headwind of lagged monetary tightening remains in DM countries, and will likely be one of the forces slowing the U.S. economy

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EMFX Outlook: USD Strength to Ebb with Different EM Impact
Paying Article

June 25, 2024 8:05 AM UTC

 We see Fed rate cuts from September starting to soften USD strength into year end and 2025.  Beneficiaries will include currencies with inflation moving towards target and high real rates or, alternatively, undervalued currencies. This should benefit the Brazilian Real (BRL) and Indonesian Rupiah

June 24, 2024

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LatAm Outlook: Pausing the Cuts
Paying Article

June 24, 2024 6:00 PM UTC

·       Brazil and Mexico growth will decelerate from the growth rates in 2023. The stronger basis of comparisons in 2023 and the tight monetary policy will diminish growth during 2024. Brazil robust Agricultural growth will not repeat in 2023 while Mexico is on the limit of growing due to a

June 12, 2024

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Mexico: Political Noise Amplifies Market Fears Amid Sheinbaum's Win
Freemium Article

June 12, 2024 9:07 PM UTC

Claudia Sheinbaum's election win was expected, but MORENA's strong victory was surprising. This led to market concerns, significant peso depreciation, and fears of anti-market policies under Sheinbaum's possibly more radical government. Lopez-Obrador's proposed judicial reforms added to market worri

June 07, 2024

Mexico CPI Review: Some Pressure in Services
Paying Article

June 7, 2024 5:10 PM UTC

INEGI reported a 0.2% CPI decrease in May, with annual CPI stable at 4.7%. Electricity prices dropped, contributing to the decline. Core CPI rose 0.2%, while Non-Core fell 1.3%. Persistent Services CPI and food price shocks may sustain inflation. Peso volatility could also pressure inflation, likely

June 03, 2024

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Mexico Elections: Sheimbaum Wins as Expected but the Surprise is in the Legislative
Freemium Article

June 3, 2024 3:03 PM UTC

The Mexican election saw Sheinbaum from MORENA likely securing 57-60% of the votes, a significant lead over Xóchitl Gálvez. The MORENA coalition is projected to gain a two-thirds majority in the Chamber of Deputies but may fall short in the Senate. This result raises concerns over potential anti-m

May 29, 2024

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Mexico Elections Update: Sheimbaum to Confirm Government Continuity
Freemium Article

May 29, 2024 1:55 PM UTC

On June 2, Mexicans will vote for a new President, 500 deputies, and 128 senators. Claudia Sheinbaum from MORENA is favored to win, supported by incumbent President Lopez-Obrador's high approval rating. However, MORENA is unlikely to secure a two-thirds majority in Congress, limiting drastic policy

May 24, 2024

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Banxico Minutes: Unanimous Pause, Diverging Cuts
Paying Article

May 24, 2024 9:24 PM UTC

Banxico maintained the policy rate at 11%, reflecting a cautious stance amid persistent inflation and economic uncertainty. The board was unanimous in this decision but divided on the timing of future cuts. Despite expectations for a rebound in economic activity, concerns about inflationary pressure

May 20, 2024

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Mexico: Exports Loosing Traction
Paying Article

May 20, 2024 2:38 PM UTC

At the beginning of the year, Mexico's exports are losing traction, stagnating as imports surpass exports. This could be due to adjustments to U.S. demand and inflation effects. With internal demand cooling and the U.S. economy decelerating, growth may shift to Mexico’s internal economy, bolstered

May 10, 2024

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Banxico Review: Hold Rates
Paying Article

May 10, 2024 12:44 PM UTC

Banxico's decision to maintain the policy rate at 11% reflects a cautious stance amidst rising inflation and a slowing economy. Despite external volatility, the MXN remains resilient. The main concern is services inflation being stickier. With a revised inflation forecast indicating a longer period

May 09, 2024

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Mexico CPI Review: 0.2% Growth in April
Freemium Article

May 9, 2024 6:11 PM UTC

April's CPI data, despite a 0.2% m/m growth, reveals a significant y/y uptick to 4.6% from March's 4.4%, challenging norms due to electricity tariff adjustments. Core CPI maintained stability with a 0.2% increase, while Core Goods CPI rose by 0.3% and Services CPI by 0.1%, accumulating a 5.2% y/y gr

May 07, 2024

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Banxico Preview: Continuing at 25bps
Paying Article

May 7, 2024 12:43 PM UTC

Banxico will convene on May 9 to decide on the policy rate, having initiated a possible cutting cycle. Despite concerns, the MXN remains stable. The 25bps adjustment aims to maintain tight monetary policy while mitigating inflation. The board may split over this decision, but Banxico is likely to co

May 03, 2024

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EMFX: Diverging On Domestic Forces Not Less Fed Easing Hopes
Paying Article

May 3, 2024 10:45 AM UTC

While U.S. economic developments, plus Fed policy prospects, will be important in terms of EM currency developments, domestic politics and fundamentals will also be decisive. These can keep the South Africa Rand volatile in the remainder of 2024, given the risk of a coalition government and African

April 30, 2024

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Mexico GDP Review: 0.2% Growth but Still Subpar
Paying Article

April 30, 2024 5:54 PM UTC

INEGI released Mexico's Preliminary GDP for Q1 2024, showing 0.2% growth, slightly above expectations. Annual GDP slowed to 2.0% from 2.8% in Q4 2023. The economy is losing momentum due to tight monetary policy and weakened U.S. demand. Agriculture contracted by 1.1%, Industry by 0.4%, while Service

April 29, 2024

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Mexico GDP Preview: Stagnation in the First Quarter
Paying Article

April 29, 2024 5:22 PM UTC

INEGI will release Mexico's Preliminary GDP data, indicating 0% growth in Q1, likely due to stagnation in key sectors like manufacturing and construction. The service sector, hit hard by the pandemic, also shows signs of sluggishness. While recovery is expected, sustained poor growth raises concerns

April 19, 2024

Mexico Elections: Sheimbaum Victory will likely mean a continuity of Current Government
Freemium Article

April 19, 2024 9:23 PM UTC

On June 2, Mexico will see historic general elections, marking the potential for its first female President. Claudia Sheinbaum of Morena and Xóchitl Galvés of PAN-PRI lead the race. Sheinbaum aims to continue Lopez-Obrador's legacy, while Galvés emphasizes social mobility. The polls show Sheimbau

April 18, 2024

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Central and Latin America: Country Risk Ratings
Paying Article

April 18, 2024 9:00 AM UTC

We provide country risk reviews for Central America countries including Brazil/Mexico/Peru/Argentina/Cuba and El Salvador.  

April 09, 2024

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Mexico CPI Review: Slightly Below Expectations, with Concerns in Service
Freemium Article

April 9, 2024 6:43 PM UTC

Mexico's March CPI data, released by the National Statistics Institute, shows a slight increase of 0.29%, below the 0.36% expectation. Year-on-year CPI remains stable at 4.4%, above Banxico's 3.0% target. While fruit and vegetable prices dropped, transport costs rose. Concerns arise with Services CP

April 08, 2024

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Mexico CPI Preview: Well Behaved March
Freemium Article

April 8, 2024 1:10 PM UTC

On April 9th, Mexico's National Institute for Statistics will release March's CPI data. Forecast suggests a 0.4% rise, keeping YoY CPI stable at 4.5%, mainly due to base effects. Core CPI likely to remain steady at 4.5%, showing progress in disinflation despite non-alignment with Banxico's 3.0% targ

April 05, 2024

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Banxico Minutes: Hawkish Cut and Different Views
Paying Article

April 5, 2024 2:18 PM UTC

Banxico's recent meeting minutes reveal a split among board members regarding monetary policy, with a 25bps rate cut to 11.0%. Despite progress in curbing inflation, differing views on policy direction persist. Inflation expectations deviate from targets, with potential risks in fiscal policy and wa

April 03, 2024

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March Outlook: Europe in Focus, Then Elections Around the World
Paying Article

April 3, 2024 9:00 AM UTC

April 02, 2024

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Asset Allocation: Pausing for Breath
Paying Article

April 2, 2024 9:00 AM UTC

Into Q2, data and policy (actual and perceived) will dominate DM markets. The ECB will likely take the spotlight with a 25bps cut on June 7, as the Fed face a better growth/more fiscal policy expansion and a tighter labor market than the EZ but also with a better productivity backdrop and outlook to

March 27, 2024

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March Outlook: Europe in Focus, Then Elections Around the World
Paying Article

March 27, 2024 9:00 AM UTC

March 26, 2024

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EM FX Outlook: Domestic Drivers Key
Paying Article

March 26, 2024 9:01 AM UTC

   In terms of spot EM FX projections domestic drivers remain critical, with a desire to avoid appreciation versus the USD for some countries.  Fed easing in H2 2024 should however help EMFX more broadly and allow some recovery in spot rates (e.g. Indonesian Rupiah (IDR), South African Rand (ZAR)

March 25, 2024

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Outlook Overview: Europe in Focus, Then Elections Around the World
Paying Article

March 25, 2024 11:15 AM UTC

March 22, 2024

LatAm Outlook: Getting Deeper in the Cutting Cycle
Paying Article

March 22, 2024 7:04 PM UTC

·       Brazil and Mexico growth will decelerate from the growth rates seen in 2023. The stronger basis of comparisons in 2023 and the tight monetary policy will diminish growth during 2024. Brazil robust agricultural growth will not repeat in 2024, while Mexico growth is restrained by a tigh

March 21, 2024

Banxico Review: 25bps Cut but not Unanimously
Paying Article

March 21, 2024 9:09 PM UTC

Banxico has cut the policy rate by 25bps to 11% from 11.25%. The board stressed the drop on core inflation although their balance of risks is biased to upside. Banxico has not given any forward-guidance stating the next decision will be data-dependent. We believe Banxico will continue to cut the pol

March 19, 2024

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Banxico Preview: Ready to Start Cutting
Paying Article

March 19, 2024 2:40 PM UTC

The Banxico board will meet on Mar. 21 to decide the policy rate after 12 months of unchanged rates at 11.25%. With inflation now at 4.4% and signs of economic deceleration, a cutting cycle is anticipated. Banxico's exclusion of forward guidance hints at potential cuts, despite possible dissent amon

March 07, 2024

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Mexico CPI Review: CPI Grew 0.1% in February
Freemium Article

March 7, 2024 10:16 PM UTC

The February CPI figures released by Mexico's National Institute of Statistics and Geography show a slight 0.1% increase, aligning with expectations. Year-on-year CPI dropped to 4.4%, ending a three-month rise. Food and Beverages notably fell by 1.3%, while Housing and Transports saw positive growth

March 04, 2024

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Mexico CPI Preview: Easing Inflation to Back March Cut
Paying Article

March 4, 2024 1:21 PM UTC

INEGI will release February's CPI data, with an expected growth of only 0.1%. Despite this, the Y/Y index is forecasted to fall to 4.4% from January's 4.8%. Notably, Non-Core food CPI contracted by 3.9% in February, showing a reversal from January's rise. We anticipate a 0.3% increase in Core CPI, a

February 22, 2024

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EMFX: Carry and Domestic Fundamentals Rather Than the USD
Paying Article

February 22, 2024 10:00 AM UTC

Bottom Line: Most major EMFX currencies have performed better than the Euro or the Japanese Yen against the USD in 2024 (Figure 1).  This is due to carry trades in Latam, but elsewhere reflects global equity love on Indian equities or domestic fundamentals.  This resilience for Brazilian Real/Indi