Mexico Rate Seen Unchanged

According to market consensus, Mexico’s central bank should leave its rate unchanged at 4.50% today. “While the central bank is likely to acknowledge the large and encouraging drop in inflation rates, it will probably also reiterate that the rapid tightening of the output gap and upside risks from commodity prices are the main reasons why it has to remain vigilant,” says Goldman Sachs. Bank of America Merrill Lynch says that in March inflation came in at 0.19%, below market expectations, leading to a substantial decline in annual inflation to 3.04%.