Archive

Mexico: 50bp Rate Cut To 8% (Consensus 8%) in Jun-25

• Banxico cut rates by 50 basis points to 8.00% as expected, but Deputy Governor Jonathan Heath's dissent signals growing concern about aggressive easing while inflation remains at 4.51%.
• The central bank raised year-end inflation forecasts to 3.7% from 3.3% while maintaining that convergence to the 3% target will occur by Q3 2026.
• Removal of language about future cuts of "similar magnitudes" suggests a shift towards more cautious easing amid trade policy uncertainty and persistent inflation pressures.

Thailand: Policy Rate Held At 1.75% (Consensus 1.75%) in Jun-25

• The Bank of Thailand maintained its policy rate at 1.75% by a 6-1 vote, in line with expectations, citing robust first-half growth but heightened risks from US trade policy and global uncertainties.
• Despite raising its 2025 growth forecast to 2.3%, the MPC flagged a likely economic slowdown in the second half of the year, subdued inflation well below target, and negative credit growth as key factors influencing future rate decisions.
• The Committee signalled a data-dependent approach, preserving limited policy space and indicating that further rate cuts would require a significant deterioration in growth or inflation outlook.

SNB: 25bp Rate Cut To 0.0% (Consensus 0.0%) in Jun-25

• The SNB lowered its policy rate to 0% as expected, responding to declining inflation and subdued price pressures, with the latest forecasts indicating inflation will remain well within the price stability range through 2027.
• The SNB’s guidance remains cautious, highlighting global trade tensions, external risks, and persistent uncertainties as key factors shaping the interest rate outlook.
• Future policy decisions will be data-driven, with the SNB prepared to adjust rates further or intervene in currency markets if inflation deviates from target or if external shocks intensify.

BoE Still Seeking Evidence

• Guidance around an unsurprisingly unchanged BoE rate preserved the necessary uncertainty about when it might ease again, albeit with a broad bias to do more later.
• Dave Ramsden joined the dovish dissent, taking it to three for a 25bp cut, but none of them are in the MPC majority revealed in May as leaning towards a slower pace of cuts.
• We believe the August decision remains finely balanced for the majority. Ongoing data resilience, discouraging the Fed and ECB from easing, should also keep the BoE on hold.

By Philip Rush