Moderation in Mexico growth outlook throws downside risk on policy tightening prospect

March industrial production suggests the economy likely contracted in Q1 on a sequential basis. Moreover, softer data from the US could result in weaker-than-expected exports and growth bounce-back in Q2 leading to the possibility of 2015 being the third sub-trend growth year in a row. 

Meanwhile, headline and core inflation remain close to and less than Banxico's target respectively and there is little possibility of core inflation overshooting the target anytime soon. 

"The moderation in the growth outlook could push Banxico to extend the pause further into 2016, presenting a downside risk to our forecast of the first rate hike coming in Q1 16." - said Societe Generale in a report