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Banxico expected to hike by 25 bp – TDS

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Dec 11, 2015.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

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    FXStreet (Edinburgh) - In the view of strategists at TD Securities, the Mexican central bank – Banxico – cold rate hikes by 25 bp at its meeting next week.

    Key Quotes

    “As the Fed goes, so does Banxico: we and the market expect a 25bp rate hike from the central bank, an expectation (given weaker price dynamics) based on the presumption that it will move in lock -step with the Fed, at least near the start of the policy cycle”.

    “Bloomberg consensus has the bias 4:3 in favour of a hike, however it would be unlikely that we see a deviation from the very much expected Fed hike, and so a failure to hike would certainly hit MXN”.

    “Banxico’s meeting calendar for 2016 suggests that it will remain fairly Fed-focused until midyear, at least in terms of proximity to FOMC meetings, which may mean close tracking into the later spring for Mexican policy makers”.
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