Banxico to cut rates as early as September – Goldman Sachs

According to the Goldman Sachs analysts, the Mexican central bank - Banxico (Banco de México) is seen cutting the benchmark interest rates in September, in the wake of the US-Mexico trade deal and a weak economic situation.

Key Quotes:

"Monetary policy in Mexico is was "way too tight".

A cut could come without much warning, not going to be preparing the ground over two or three meetings, possibly as early as September.

A rate cut needed as the economy is underperforming, the output gap is widening and amid signs of a damaged jobs market.

A positive is a demand, no cut needed to boost demand

Deal with the US adds costs for Mexico:

• border protection.
• housing and feeding asylum seekers.
• potential political cost."