This afternoon the Mexican statistics office will release the March inflation figures. However, they are unlikely to tell us much new, Commerzbank's FX analyst Michael Pfister notes.
Banxico is likely to continue cutting in the coming months
"Firstly, inflation figures are released every two weeks in Mexico, which means that we already know half of March's price increases. Second, economists surveyed by Bloomberg expect the figures to be little changed - still well below 4% year-on-year. Although this means that inflation remains above the 3% target, the deviation is not exceptionally high for an emerging market."
"In view of these figures, Banxico is likely to continue cutting the still rather high real interest rate in the coming months. However, as the market already anticipates this, the simmering trade war is likely to remain more relevant to the peso than domestic inflation figures for the time being."
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