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For its part, Mexico’s central bank is not expected to go full throttle on rate hikes and investors are not expecting another when the bank meets in May.

“The central bank is in the midst of a mini-tightening cycle but has been on hold since the last intra-meeting emergency 50 bp hike to 3.75% in February. CPI rose 2.7% y/y in March, below the 3% target and in the bottom half of the 2-4% target range. Barring a significant collapse in the peso, we think the tightening cycle is over for the time being. Officials have expressed concern about inflation pass-through from the weak peso, but we simply haven’t seen any yet. Next policy meeting is May 5, no change expected then,” according to the BBH note posted by Barron’s.

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