Banxico Seen Continuing Rate Hikes

Banxico Seen Continuing Rate Hikes

Bonds Corporate & Sovereign Strategy

Following last week’s surprise Mexican rate hike, which dragged down stocks, analysts anticipate further monetary tightening this year. Banxico raised the overnight rate by 25bp to 7.75% Friday, its first change since October. “We do not view this as the start of a long tightening cycle and we tend to think that the bank may require less of a tightening than the curve is currently pricing in (50bp in six months),” says Credit Suisse. Morgan Stanley meanwhile revised its prediction for the year-e

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