Inflation in Mexico likely slowed in early October

• Mexico's annual inflation rate likely slowed in the first half of October, supporting bets the central bank of Latin America's second-largest economy will continue to cut its benchmark interest rate through the end of this year.
• The median average forecast of 11 analysts polled by Reuters suggested annual inflation edged down to 3.7% in the period, after four consecutive fortnights of increases. Core inflation, an index that strips out highly volatile products, likely dropped to 4.24%, the poll found, which would mark its lowest annual level since the first half of August. These forecasts would lift headline inflation by 0.35% and core inflation by 0.19% compared to the prior two weeks. Mexico's statistics agency is set to release the official data on Thursday.
• Mexico's central bank last month cut its benchmark rate for the tenth consecutive time, bringing it down to 7.5%. The central bank's board is expected to consider further cuts going forward.
• It did not say how big the coming cuts would be, but the market expects quarter-percentage-point reductions in each of its rate decisions next month and in December, which would bring the benchmark rate to 7% by the end of 2025
• The bank's Deputy Governor Jonathan Heath, who has opposed recent rate cuts from inside the board, said in a recent interview that the central bank should not rush rate cuts until it is certain inflation is resuming a clear downward trend.

(Source: Reuters)