Mexican Headline Inflation Seen Easing In October, Core Inflation Up

• Mexican inflation is expected to have moderated in October but remained well above the central bank's target, likely cementing forecasts that monetary policymakers will again hike the benchmark interest rate.
• Inflation has blown past the Bank of Mexico's target rate of 3%, plus or minus one percentage point, prompting it to increase its key lending rate by a cumulative 525 basis points to 9.25% during the current hiking cycle, which began in June 2021.
• The central bank's latest monetary policy decision will be announced on November 10, when it is expected toraise its key interest rate by 75 basis points, following the U.S. Federal Reserve's three-quarters of a percentage point hike on November 2.
• However, the closely watched annual core inflation rate, which strips out some volatile food and energy prices, slowed to 8.41% in the 12 months through October, coming in slightly below the 8.44% forecast from analysts at Reuters.
• Despite decelerating from the 8.7% annual rate seen last month, Mexico's inflation remains well above target and markets forecast a fresh 75 basis-point interest rate hike to 10% this week.

(Source: Reuters)