Latam Macro Notes: Mexico – June inflation breakdown supports new split within Banxico’s board

Research evidence excerpt

Latam Macro Notes: Mexico – June inflation breakdown supports new split within Banxico’s board

Deutsche Bank

Research

Emerging Markets Date

Latam Macro Notes 9 July 2026

Mexico – June inflation breakdown supports

Francisco Campos new split within Banxico’s board

Chief LatAm Economist

+1-212-250-9764

Key points:

• June headline inflation surprised to the downside, falling 0.27% m/m and Beatriz Garcia Nunes

slowing to 3.37% y/y, mainly on a sharp drop in tomato prices and other LatAm Economist

+1-212-250-9584 perishable foodstuffs.

• Core inflation also came in below expectations, though by less than

headline, as goods inflation continued to soften while services remained

sticky in the mid-4s.

• World Cup-related pressures were visible in hotels and tourism services,

but remained contained across air transportation and restaurants, bars

and similar services.

• We estimate that headline inflation will likely close 2026 at 4.06% and

core at 4.08%.

• Banxico published the minutes from its latest monetary policy decision,

which resulted in a unanimous decision to leave the policy rate

unchanged at 6.50%.

• In our view, the minutes suggest that the Board has re-sorted into three

camps: two dovish members comfortable with stable rates, one hawk

arguing that there is no room for further accommodation, and two

neutral/cautious members focused on services inflation persistence and

latent external risks.

• The June inflation reading, which featured persistent services inflation,

along with renewed skirmishes in the Middle East, should preserve this

split in the Board.

• The hawk and the two neutral/cautious members would form a majority

that makes Banxico more agnostic toward the prospect of hikes if the Fed

tightens policy, in our view.

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