MEXICO: JP Morgan Sees Core Inflation Rising Towards 4% In Q1
Jan-08 16:19
- December CPI inflation data are due tomorrow, with analysts expecting the headline rate to decline to 4.23% y/y, from 4.55%, as prices rise by 0.38% on the month (vs. +0.44% previously). At the same time, core inflation is seen edging up slightly to 3.64% y/y, from 3.58%, as core prices rise by 0.50% m/m, due to the continuation of the reversal in the Oct/Nov discounts. JP Morgan emphasises ‘other services’ as the main source of concern, expected to be running at 5.8% 3m/3m saar by the end of 2024, keeping core services at 4.8%.
- Overall, JPM says that the momentum in core inflation at 3.5% is reasonably positive even if they expect it to deteriorate towards 4% at the end Q1 25 and stay there through most of the year. JPM now expects headline inflation to be at 4% this year, from 4.3% in 2024, with core sticky near the upper bound of Banxico’s target range, at 3.9%.
- JPM acknowledges improvements in inflation expectations and cooler demand-side pressures, but still reckons that incoming shocks will bring knock-on effects sooner rather than later. In particular, they note the incoming annual excise tax hikes and the MXN depreciation, which should translate into a 30-40bp pass-through.
Want to read more?
Find more articles and bullets on these widgets:
Historical bullets
FED: US TSY 13W AUCTION: NON-COMP BIDS $2.330 BLN FROM $81.000 BLN TOTAL
Dec-09 16:15
- US TSY 13W AUCTION: NON-COMP BIDS $2.330 BLN FROM $81.000 BLN TOTAL
FED: US TSY 26W AUCTION: NON-COMP BIDS $1.999 BLN FROM $72.000 BLN TOTAL
Dec-09 16:15
- US TSY 26W AUCTION: NON-COMP BIDS $1.999 BLN FROM $72.000 BLN TOTAL
US DATA: NY Fed Consumer Inflation Expectations Firm A Touch
Dec-09 16:11
NY Fed consumer inflation expectations all increased a tenth in November, albeit with the 3Y metric exaggerated by rounding. The longer-term measures lag the recent increase seen in the U.Mich consumer survey where the 5-10Y dipped to 3.1% in preliminary December data after a rare push above its range to 3.2% in November.
- 1Y: 2.97% after 2.87%, extending a broad stabilization having averaged 2.97% for the latest six months.
- 3Y: 2.57% after 2.54%, towards the middle of the ytd range but close to the 2.6% averaged in 2019.
- 5Y: 2.9% after 2.8%, having been either 2.8% or 2.9% since June.
