LATAM: Week Ahead: Banxico QIR / Minutes, Colombia, Mexico GDP, Brazil Activity
Feb-14 17:20
- Banxico is due to publish both its quarterly inflation report (Weds) and minutes to the Feb 6 MPC meeting (Thurs) next week. At that meeting, the central bank delivered a larger 50bp rate cut, in a split vote, with Deputy Governor Heath voting for a smaller 25bp reduction. On the data front, Q4 GDP is due in both Colombia (Mon) and Mexico (Fri), while December economic activity stats from Peru (Sat) and Brazil (Mon) also cross.
- Peru December economic activity and January labour market cross on Saturday, with growth seen holding at 3.9% y/y, which would take 2024 full-year GDP growth to 3.2%.
- On Monday, Colombia’s economy is expected to have grown by 0.3% q/q in Q4, lifting annual growth marginally to 2.1% y/y. This would take full-year GDP growth to 1.7%. Elsewhere, Brazil December economic activity is seen slowing to 3.7% y/y, amid the restrictive monetary policy stance. The BCB’s Focus survey and Argentina budget data are also due.
- The calendar is light on Tuesday, with just Argentina January trade and the latest BanRep economist survey crossing.
- On Wednesday, Banxico will publish its Q4 inflation report. Inflation forecasts are expected to be in line with those from the recent MPC meeting, which showed inflation converging to the 3.0% target in Q3 2026. Focus will be on likely downward revisions to GDP growth and the implications for the monetary policy outlook.
- Banxico will then publish the minutes to its Feb 6 MPC meeting on Thursday, which should shed light on the decision to cut by 50bp as well as dynamics within the new Board composition. Mexico December retail sales and the latest Citi economist survey are also due.
- On Friday, final Q4 GDP figures for Mexico will be released. Initial estimates suggested a 0.6% q/q contraction, with annual growth slipping to just +0.6% y/y. This put full-year growth at 1.5% provisionally, with estimates for this year sitting nearer 1.0%.
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PIPELINE: $1B Citadel 2Pt Debt Launched
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US: Trump To Begin Presidency "In Delicate Position", NPR
Jan-15 17:17
A new survey from NPR/PBS News/Marist found that President-elect Donald Trump, "will begin his presidency in [a] delicate position,” noting that survey respondents “have high expectations that their personal financial situations will improve under Trump, but more think tariffs will hurt rather than help the economy.”
- NPR notes: “Trump has promised bold action, but, as the NPR poll shows, the politics may be tricky. Presidents often become vulnerable because of overreach. They tend to believe — falsely — that because they were elected, they have a mandate for everything on their agenda. Clearly, that's not the case.”
- Lee Miringoff at Marist notes: "The opening round of the second term is not going well with the public. Americans are not convinced of Trump's agenda pillars, including pardons and tariffs. Mass deportations are only getting mixed reviews."
Figure 1: Support for President-elect Trump's Policy Proposals
Source: NPR, Marist, PBS News
BOE: Taylor sees "small" risk that a downside risk to case 1 may be needed
Jan-15 17:12
One last point on Taylor here before the Q&A starts - he's also talking about potential evolutions of scenario analysis and noting that the cases looked at will change over time.
- He raises the possibility of a potential downside risk to case 1 - in which Bank Rate might need to be "below the neutral level for a time, as in past downturns".
- He notes that "The risk of this case may be small as of now, but the costs, both of undershooting the inflation target and of a recession, could be very high."
