Bank of Mexico

Risk Aversion Persists as Investors Get Ready for U.S. PPI Release

August 11, 2023

Any sense of investor complacency after Thursday’s CPI figures was squelched by San Francisco Fed President Daly’s cautionary remarks that sustainable price stability will remain elusive without less labor market tightness than exists currently. An enduring impact of former Fed Chairman Volcker’s victory over inflation forty years ago is that higher-than-desired U.S. inflation provides support […] More

Weaker Growth, Lessening Inflation, But Central Banks Not Done Tightening

June 23, 2023

Preliminary purchasing manager survey findings for June revealed a surprisingly steep softening of growth and subsiding inflation. However, inflation remains well above target and is exhibiting particular downside rigidity in the all-important service sectors. A slew of central bank policy reviews over the past two weeks elicited hawkish announcements for the most part. All in […] More

25-Basis Point Hike in Bank of Mexico’s Interest Rate

March 31, 2023

Like the South African Reserve Bank and Central Bank of Colombia, news arrived late yesterday that the Bank of Mexico also was raising its policy rate. The increase of 25 basis points was smaller than earlier moves but lifts the overnight interbank rate to a record high of 11.25% versus a pandemic low of 4.0% […] More

Bank of Mexico’s 50-Basis Point Rate Hike Exceeds Expectations of Half That Much

February 9, 2023

Mexico’s overnight interbank rate has undergone big swings since the onset of the Covid Pandemic at the start of 2020. The Bank of Mexico’s Board cut such from 7.25% to 4.0% between February 2020 and February 2021, then hiked the rate by 150 basis points over the balance of 2021 and by an additional 500 […] More

Mexican and Peruvian Monetary Policies Tightened

November 11, 2022

Interest rate hikes were announced late Thursday in Mexico and Peru. The Bank of Mexico‘s overnight interbank interest rate was raised by an as-expected 75 basis points to 10.0%. The policy rate has been increased at twelve straight policy reviews since June 2021, including moves of 75 basis points each in the latest four instances. […] More

Post-CPI Equity Rally Gets Fresh Thrust from Chinese Covid Changes; DXY Has Dropped 5.4% Since Nov 3rd

November 11, 2022

On this Veteran’s Day holiday, U.S. banks will be closed, but the stock market is trading. U.S. equities had their biggest daily advance in over two years after Thursday’s CPI report, and stock futures this morning show a further 0.5% advance. Chinese officials, after initially denying rumors that a relaxation of the Zero Covid policy […] More

Third Quarter Ushered Out With Disturbing Inflation Data, More Central Bank Hikes,High Tension in Asia, a Mega-Storm in the U.S. Southeast, and a Strong Dollar

September 30, 2022

The weighted DXY dollar index rose 0.2% overnight but is 2% below Wednesday’s peak. The dollar advanced so far today by¬† 0.4% against the euro, Swiss franc, Australian dollar and sterling but just 0.1% versus the yen. Thursday had seen heavy selling of equities. Share prices today closed down 1.8% in Japan, 1.2% in Australia, […] More

Bank of Mexico Raises Key Interest Rate by 75 Basis Points

August 12, 2022

Officials at the Bank of Mexico by a unanimous vote agreed to lift their overnight interbank lending rate by 75 basis points to 8.5%, which matches the highest rate level since November 2005. From February 2020 through February 2021, the rate had been reduced 325 basis points in total to 4.0%, but rate increases that […] More

Dollar Closing August’s Second Week on an Up Note

August 12, 2022

Prior to the release of U.S. import price data, the dollar was showing overnight gains of 0.6% against the yen and sterling, 0.5% versus the DXY weighted index, 0.4% relative to the euro and 0.3% vis-a-vis the Aussie dollar. A number of factors are supporting the dollar: lessened inflation concerns after reports of lower-than-forecast CPI […] More

Another Bank of Mexico Policy Rate Hike

June 24, 2022

The Bank of Mexico’s overnight interbank rate was lifted by 75 basis points to 7.75%, matching market expectations and also the recent incremental tightening of the federal funds rate. 7.75% constitutes the Mexican policy rate’s highest elevation since shortly before the pandemic’s onset. The rate’s pandemic low of 4.0% occurred between February and June of […] More