Mexico Consumer Prices (Feb.)

The further rise in Mexican inflation in February to 2.9% y/y from 2.5% y/y in January, was due largely to a pick-up in food inflation, rather than an increase in general price pressures. Even so, with the headline rate likely to breach the central bank’s 3% target over the coming months, and policymakers still sounding hawkish – despite the recent rebound in the peso – we expect another rate hike in the first half of this year.