Bank of Mexico

Bank of Mexico’s Fourth Straight Rate Cut …and More Likely in Future

May 14, 2020

The first overnight rate cut of 25 basis points done in February has been followed by 50-basis point moves in March, April and now May. Today’s action was larger than some analysts anticipated but decided by a unanimous 5-0 vote. The key rate’s new level of 5.5% represents a 3-1/2 year low and a total […] More

More Macroeconomic Relief around the World

April 22, 2020

The U.S. Congress approved a fourth fiscal package that’s just a tad short of $500 billion. South Africa unveiled $26 billion of fiscal support, which is equal to about a tenth of GDP. The Bank of Mexico Governing Board held an unscheduled meeting, cutting its policy rate for the third time this year. Along with […] More

Central Bank Rate Cuts in Mexico and Albania

March 25, 2020

Given the flurry of inter-meeting central bank interest rate cuts during the Covid-19 pandemic, some moves have slipped initially under the radar. The Bank of Mexico overnight interbank rate had been already cut by 150 basis points since last August. At an emergency Governing Board meeting last Friday, the policy rate was sliced by a […] More

Mexico’s Fifth Central Bank Rate Cut Since Last August

February 13, 2020

The Governing Board of the Mexico has just reduced its overnight interbank interest rate to a 3-year low of 7.0% from 7.25%. Four prior cuts in 2019 were made in August, September, November and December — each by 25 basis points as well. That reverses half of 250 basis points of tightening in 2017-2018. A […] More

More Smoke than Fire

December 20, 2019

A lot of economic data was released on the final day of the final meaningful week of 2019, but the market is settling into yearend mode and showed a muted reaction. The dollar firmed overnight by 0.3% against the euro and Swiss franc but slipped 0.3% relative to sterling. There were dollar upticks of 0.2% […] More

Bank of Mexico’s Fourth Interest Rate Cut since August

December 19, 2019

The four 25-basis point central bank rate cuts in 2019 reverse the four hikes made in 1918, but the new 7.25% overnight interbank rate level is still four percentage points higher than the end-2015 level. A released statement explaining today’s rate reduction cites continuing sluggish growth, a weak economic outlook, growth and inflation risks skewed […] More

Bank of Mexico Interest Rate Cut Again

November 15, 2019

The Governing Board of the Bank of Mexico voted 5-2 in favor of a third consecutive 25-basis point interest rate cut, which becomes 7.5%. The two dissenters wanted a 50-basis point reduction. The combined 75-basis point reduction remains small in comparison with 500 basis points of tightening during 2016-18. Officials released a statement that notes […] More

Out of Fixed Income Assets and Into Stocks

November 15, 2019

After a few days that saw sovereign debt yields decline, ten-year U.S. Treasuries, German bunds and British gilts each rose two basis points overnight. In stock market action, equities rose 0.9% in Australia, 1.1% in South Korea, 0.7% in Japan and Taiwan but slipped 0.6% in China. European stock markets so far show gains of […] More

Bank of Mexico Cuts Overnight Interbank Rate Again

September 27, 2019

Late yesterday came news that the Bank of Mexico had reduced its overnight interbank rate by 25 basis points for a second straight month.  The rate level now becomes 7.75%. These moves reverse 100 basis points of policy tightening in 2018, and more cuts seem likely soon. According to a released statement, five of seven […] More

Trade Talks Back in the Spotlight

September 27, 2019

A number of factors could have made Friday an ugly day in the marketplace — the U.S. and British political crises, weak European and U.S. data, and Japanese disinflation. But instead, the mood has been lifted by the announcement that U.S. and Chinese trade delegations will restart formal talks in Washington on October 10th. Share […] More

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