📝Banxico To Be On Course to Start Easing In Early 2024: Wells Fargo

In Mexico, October saw a further deceleration of inflation as the headline CPI slowed to 4.26% year- over-year and the core CPI slowed to 5.50%. Core goods inflation slowed further to 5.64%; however, services inflation firmed slightly further to 5.34%. Moreover, inflation remains elevated above the central bank's 3% +/- 1% inflation target range. Against this backdrop, the Bank of Mexico again held its policy rate steady at 11.25% at this week's monetary policy meeting. It did, however, make some modest changes to its accompanying statement, with the central bank saying that “in order to achieve an orderly and sustained convergence of headline inflation to the 3% target, the reference rate must be maintained at its current level from some time.” Previously, the central bank had said interest rates could need to remain at their current level for an “extended period.” The Bank of Mexico did say that inflation risks were still biased to the upside. Overall, the Bank of Mexico appears to be on course to initiate a rate cut cycle starting in the early part of 2024. - Wells Fargo