Mexico Surprises with Rate Hike

In a surprise move, Mexico’s central bank has raised the floor on the overnight rate by 25bp to 7.50%. Most analysts were expecting no change. The bank abandoned the tightening bias but said it was on the lookout for inflation. “Today’s decision will strengthen the central bank’s credibility, particularly as it comes less than one week before the Fed is widely expected to cut rates again,” says Credit Suisse in a Friday report.