• LOWEST POINT Consumer prices in Mexico grew 0.26% in September bringing inflation to 3.00 in the year through September marking the lowest monthly number in three years, according to non-seasonally adjusted figures presented by the Mexican national statistics body (INEGI).
• BIG EXPECTATIONS The new inflation number which falls in line with Mexico’s Central Bank (Banxico) target fuels expectations of further interest rate cuts to help boost the country’s economy; in late September, the bank’s board approved a 25 basis points (bps) cut for a second time in a row.
• PREDICTIONS “We believe that Banxico will continue with its easing cycle in the remainder of the year, with 25bps cuts in each of the last two meetings of 2019, taking the reference rate by year-end to 7.25%”, Banorte’s economic research team said.
• SEASONAL IMPACT The largest impact on inflation index in September came from the seasonal increase in educational costs both for private kindergarten and elementary school. Most of the education increases are usually accounted around this month.
