Today, the Central Bank of Mexico released the minutes of the April 30 meeting. The board decided to maintain the reference rate unchanged at 3.00% in a unanimous vote. The minutes indicated a neutral tone and highlighted continued debate regarding the right timing to start an eventual hiking cycle, with the majority of members reducing support for a pre-emptive hike, as expected.“We believe that Banxico will wait until it is clear that the US Fed will start a hiking cycle or inflation is expected to increase. Even if the Fed does not make a move this year, we believe that Banxico will have to hike at the Dec meeting – at the latest- in order to keep the reference rate constant in real terms, since inflation is expected to rebound in Jan 2016. So far, we maintain our base case scenario of a Sept hike by the Fed, with Banxico taking a safe call to start a local lift-off at the Oct meeting.” says Barclays in a report on Thursday
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