Mexico Rate Hike Likely: Barclays

Barclays expects a 25bp rate hike in Mexico this Friday, based on short term high inflation forecasts and firm international food commodity prices. “Today’s announcement by President Calderon regarding agreements to cap the prices of 150 goods reflects the seriousness of the inflation matter,” Barclays says. “We acknowledge it may pose some risk to our rate hike call, but it does not change our expectation for higher short-run inflation, and see it as a complement rather than a substitute to monetary policy,” the shop adds.