Mexico’s 12-month headline inflation rate fell slightly more than expected in November after a spike the previous month, official data showed on Monday, fueling expectations that the central bank will continue to cut its benchmark interest rate.
“It is true that if there is an opportunity to cut rates by 50 basis points and recalibrate policy towards a less restrictive stance, it is now,” JP Morgan analysts wrote in a note on Monday.
The latest inflation figures are published before the Bank of Mexico meeting next week, and after it lowered financing costs by 25 basis points in three consecutive meetings, to 10.25%, and signaled that it was possible that produce further cuts as the outlook for consumer prices improves.
“Looking ahead, we expect the window for aggressive easing to close as core inflation begins to pick up again, the economy proves more resilient and the Fed more cautious,” JP Morgan added.
