2014.04.2414:25:00UTC+00Rise in Mexico Core Inflation Likely to be Temporary

Quotes from Barclays Capital:

- Mexico CPI decreased 0.19% 2w/2w in the first fortnight of April. Although headline inflation came in line with market expectations, core inflation was higher than expected, implying that the non-core component offset this surprise. In annual terms, inflation decreased to 3.5% from 3.6% observed in the last fortnight of March.

- Although core inflation increased, this behavior should be temporary. Because the source of the core inflation surprise seems to be related to temporary factors, we do not expect these prices to persist. More importantly, annual inflation continues to decline and we expect that trend to continue for most of H1 14. If in fact the economy starts to pick up during Q2 14, core inflation might begin increasing in a consistent manner, but still well behaved.