Mexican headline inflation likely to have changed marginally in September

Mexican headline inflation data for the month of September is set to be released this week. According to a Wells Fargo research report, some easing inflation pressures are expected to be seen in September. Inflation had risen sharply in 2017 as the currency had depreciated and the economy maintained reasonable momentum.

However, inflation has decelerated through 2018 as the Mexican peso has stabilized. On a year-on-year basis, the headline inflation had risen 4.9 percent in August, while it is expected to be little changed at 5 percent in September, stated Wells Fargo.

At present, the inflation is too high and the currency is quite volatile for the Mexican central bank to consider lowering, and the central bank maintained its policy rate at 7.75 percent last week.

Meanwhile, the August industrial production growth is also set to be released and is likely to firm to 1.3 percent year-on-year.

“The industrial sector could potentially firm further in coming months after the recently announced trade agreement with the U.S. and Canada, which should help lift investment uncertainty and maintain access to key export”, added Wells Fargo.