Mexico: Inflation data strengthens scenario of Banxico remaining on hold – TD Securities

Data released on Monday showed inflation continues to ease in Mexico. Analysts at TD Securities point out that the numbers strengthen their scenario of the Bank of Mexico (Banxico) remaining on hold at its next monetary policy meeting. 

Key quotes: 

“Core inflation surprised slightly to the downside in the first half of April. This inflation component posted a 0.18% biweekly change (below the 0.22% expected by the consensus). Thus, core inflation dropped to 7.75% in annual terms from previous 8.03%.”

“We think the slight downward surprise posted by core inflation strengthens our scenario of Banxico remaining on hold in its next monetary policy meeting (May 18). In particular, the recent performance of core inflation appears in line with Banxico's Q2 forecasts (7.5%).”