The Banco de México's (Banxico's) board of governors decides on monetary policyon Thursday 30 April. Markets expect the board to leave the policy rate unchanged at 3.0%.
In its 26 March meeting, Banxico expressed an overall neutral tone, although it acknowledged weak activity. Banxico sees a benign inflation outlook, with inflation expectations still well anchored, and has made clear that US monetary policy will play a strong role in its monetary policy decision.
Since the March meeting economic data for Mexico has brought a slightly disappointingQ4-2014 GDP reading, but better figures for Q1. For instance, February retail salesgrew 5.6% y/y, much stronger than the consensus expectation of 4.5%.
According to Standard Chartered, Banxico is likely to maintain its neutral tone, continuing to highlight the Fed's rate-hike timing as a reference for beginning its own policy-hiking cycle.
