Recent developments in the domestic scenario indicate that the Central Bank is likely to cut 25 basis points at the next Copom decision – 05/03
Except for interest rate expectations, all other variables in the Central Bank’s inflation model have deteriorated since March. This should lead the members to exclude forward guidance from the statement.
The counterpoint to this increased risk aversion came mainly from the FOMC this week, as the market envisioned a less restrictive environment ahead.
However, we maintain our perspective of a more depreciated real, even as the trade balance favors external accounts. And the domestic labor market remains resilient – which is still a point of attention regarding demand.
For more information, please check our Weekly Report 62.
